Taylor concedes aged care workers would be hit by migration plan

The Coalition's plan to slash Australia's temporary migration program would damage the economy and push talented workers offshore, education and business groups have warned.

Opposition Leader Angus Taylor has rejected criticism of the economic impact of his proposal but acknowledged the changes would hit "some" visa holders working in aged care.

"What we need to have is a reset, breathing space, get the economy moving, get the right skills matches for our country," he told 7.30.

Mr Taylor said he did not have the "exact number" of aged care workers affected, with a "transition" arrangement only flagged for health workers in the regions.

Under the Coalition's plan, graduate, bridging and student visas would be significantly cut to achieve net overseas migration (NOM) of 100,000 people for two years before returning it to about 160,000 in the fourth year.

By comparison Labor is targeting a NOM of 245,000 this year and 225,000 in 2027-28, while One Nation has pledged a "negative" intake for three years before settling at a target of 130,000 people "long-term".

Business groups warned the Coalition's low migration target undermined Australia's capacity to "prosper" while universities argued it would hurt the country's ability to funnel talented students from education into skilled work.

Coalition claims skilled migrants will offset cuts

Yesterday Mr Taylor declared he was "confident" the Coalition's migration plan would be "budget neutral" because the deep cuts to temporary visa numbers would be offset by increased taxation income from higher value skilled migrants.

But critics have questioned where the promised extra 100,000 skilled workers would come from, given the program was already demand driven.

There are also concerns that requiring almost all temporary visa holders leave Australia to lodge extension or other applications would deter high skilled workers.

Mr Taylor said the Coalition had worked with the Parliamentary Budget Office (PBO) to determine the impact on the budget but did not release the advice or indicate if modelling on the broader impact to the economy had been conducted.

The PBO's 2026-27 medium-term budget outlook modelled sustained reductions in NOM and found 40,000 fewer migrants each year would worsen the federal budget by $79.1 billion by 2036-27, while 80,000 fewer would cost about $155.5 billion.

This was largely because fewer working-age migrants would mean less income tax revenue.

The Coalition, which has committed to cuts over a four-year period, has argued the budget impact would be neutralised by an increase to the amount of skilled workers who generally earn higher wages and pay more tax.

High-skilled migrants generally deliver a stronger return per person due to their younger age, stronger wage and labour-market performance, according to Treasury's 2021 Fiscal Impact of New Australians report.

Migration cuts 'bad deal all around'

Independent economist Saul Eslake said it was "true in general terms" that skilled migrants paid more tax than other temporary migrants, but without the PBO costings of the Coalition's plan it was difficult to assess if the plan would be budget neutral.

"They clearly have sought to address concerns about the impact that a big migration cut will have on the economy," he said.

"I'm not sure I buy everything the Coalition has said, but at least it appears they have thought about it."

Mr Eslake said he thought the opposition was "right" to try focus on reducing the number of people in the country on temporary bridging visas.

But he said it felt "unnecessary" to halve Australia's humanitarian intake to 10,000 people as it was a "tiny number" in the "grand scheme" of the migration program.

Home Affairs Minister Tony Burke said the Coalition's policy was a "response" to One Nation's surge in the polls and warned it would negatively impact the economy.

"What does it mean when you get fewer skilled workers? The outcomes are pretty obvious," he said.

"It's bad for businesses, prices go up for consumers — it's a bad deal all around."

Coalition plan will 'end in tears', business groups say

Business Council of Australia (BCA) chief executive Bran Black said the major reduction proposed by the Coalition risked a "significant hit" to the economy and workforce.

"We must avoid a race to the bottom based on an arbitrary migration figure that could hurt Australia's economy while worsening the skills shortage," he said.

"There are many unanswered questions as to how a cut of 650,000 temporary visas will be achieved without creating economic damage."

Property Council chief executive Mike Zorbas said it was "hard to see" how Australia's skills gap would not get "worse" under the Coalition's plan.

"These migration cuts are just too deep for precision outcomes," he said.

Mr Zorbas said he agreed faith in the migration system had "deteriorated" but argued the Coalition's attempt to follow One Nation's policy position would "end in tears".

Master Builders Australia boss Denita Wawn said it seemed "crazy" to require skilled migrants leave the country in order to reapply for a visa in the construction sector.

"We appreciate the concern around visa hopping, but I would have thought where you've got priority issues and priority industries, and you want to get projects and houses built as quickly as possible, you would not delay that," she told News24.

Education sector joins criticism of cuts

Phil Honeywood from the International Education Association described the cuts to student and graduate visas as a "own goal" by the Coalition.

"We're talking about Australia's biggest service industry," he told the ABC.

"We're talking about the number one industry in Victoria and South Australia.

"Here we have 250,000 Australian jobs at risk for people who work in international education related areas."

Mr Honeywood said international student fees funded Australia's research output and subsidised the study of domestic students.

"Without that income, our universities are really going to be in incredible financial strain," he said.

Universities Australia chief executive Luke Sheehy said the cuts to international student and graduate visas would come with "real consequences" for the economy.

"Restricting post-study work rights … risks making Australia less competitive for talented students and graduates at precisely the time we need more skilled people," he said.

One Nation says renters will save under migration plan

Meanwhile, One Nation has released analysis of the impact of its own migration plan, which includes cutting the temporary program by 750,000 over four years, on rental inflation.

The internal modelling used rental figures from the Australian Housing and Urban Research Institute to assume a substantial reduction in demand for rented properties as a result of the migration cuts.

The party estimated a "middle" case scenario where rental inflation would reduce by 6.5 per cent, which would result in an annual saving of $2,818 on the average rental by the third year of immigration cuts.

One Nation leader Pauline Hanson said her party would deliver "net negative" migration for three years before returning to a long-term "ceiling" of a 130,000 NOM.

"A bigger population is not an achievement if Australians cannot afford somewhere to live," she said.