The drive to reduce net overseas migration and the challenges for business

Migration has re-emerged as a prominent public policy issue in recent months, having received comparatively limited attention during the lead-up to the 2025 Federal Election.  However, when the Federal Budget, released on 12 May 2026, projected higher Net Overseas Migration (NOM) figures than previously forecast, calls to address “uncontrolled mass migration” grew louder. 

What is Net Overseas Migration? 

Net Overseas Migration should not be confused with migration planning levels which relates to permanent residency grants and sits at 185,000 for the program year. The Australian Bureau of Statistics (ABS) explains NOM as the net gain or loss of population through international migration to and from Australia.  

NOM does not take into account the immigration status of arrivals and departures, and instead is focused more on movement and stay - with the relevant measure being 12 months over a 16 month period in / out of Australia. For instance, Australian citizens, permanent residents and New Zealand citizens all contribute to arrivals and departures data, as do temporary residents (such as working holiday makers and international students) who make up two-thirds of NOM.

From a COVID negative 88,000 in 2020-21, to a post COVID peak of 556,000 in September 2023, NOM has since declined year on year, and for the year ending March 2026 is 292,100. However, the Government continues to be focused on the ongoing reduction of NOM - targeting 245,000 in 2027 and 225,000 by 2028.

At a time where critical shortages exist in several sectors and approximately one-third of occupations are in short supply, the focus to reduce NOM rapidly is having a significant impact to business. 

Ministerial Directions on processing of Skilled Visas and other reforms

One key example of the impact to business was the recent Ministerial Direction 119 that commenced on 25 July 2026, which has since been replaced by two new Ministerial Directions 121 and 122 from 19 September 2026. 

The impact of Ministerial Direction 119 was immediate and led to severe curtailing of skilled talent from overseas, particularly those who did not fall within a narrow set of defined occupations and sectors. The concerns were compounded with roles in regional Australia or sponsored by accredited sponsors no longer receiving priority. Additionally, of particular impact was that the Specialist Skills Stream of the Subclass 482 - Skills in Demand visa, which caters for senior / highly skilled roles at a higher income threshold, were also not given priority. There was also no discretion for compelling circumstances to be considered. Businesses were left wondering why offshore based senior executives, specialists, those key in driving research, innovation, or in key sectors such as health and education but who were overseas, were not afforded any priority, and were suddenly facing processing times of up to 12 months in some circumstances.

New Ministerial Directions 121 (482 visas) and 122 (all other skilled, including permanent visas), now expands the priority sectors, as well as specific roles that contribute to those sectors, and provides higher priority for Specialist Skills Stream applicants. Importantly the Department can also now consider expedited processing where there are compelling circumstances (under some defined criteria). 

Whilst the revisions made to Ministerial Direction 119 provide great relief to many businesses, for some, the new Directions still create challenges. For instance, the technology and telecommunications sectors operating critical infrastructure still remain outside the priority list unless the roles are linked to, or support a specified priority sector. 

The Government continues to drive towards its NOM target in other ways. Further reforms just announced with respect to international students and their families, as well as working holiday makers and certain visitors, all aim to slow down the inward flow of migration, and limit total stay in Australia. For businesses, particularly those in regional Australia, and sectors such as aged care, retail and hospitality, who rely on students and working holiday makers to augment their local workforce, there will be substantial future impacts to plan for.

The continued focus on the reduction of NOM also presents certain risks. While NOM has become a prominent popular metric, it could also be considered a blunt instrument for assessing skilled migration policy. The importance of a skilled migration system that is evidence based, responsive to market needs and internationally competitive will go a long way to improving Australia’s productivity, investment and current economic outlook. It is important to not lose sight of Australia’s low fertility rate and that we have an ever growing ageing population, with 16% being 65 years of age or older. Migration is an important driver to offset national population and working age declines. 

So whilst we can debate the NOM number, we should also continue to recognise the importance that migration and migrants have to Australia’s prosperity and economic stability, and that business has an important voice in Australia’s skilled migration policy.