Major backdown by Anthony Albanese’s government as it readies to slash record immigration numbers to ease cost of living and housing pressures

Anthony Albanese’s Labor government will significantly reduce its “record” influx of immigrants after half a million new arrivals fueled inflation and placed further strain on Australia’s tight housing supply.

More than 500,000 new migrants have flocked to Australia in the past 12 months, the biggest annual influx in the country’s history, official figures confirm.

On Monday Albanese will announce a package of measures aimed at reducing immigration, focusing mainly on reducing the number of foreign students.

It is understood the government will tighten rules on English language requirements for international students and end agents who bring migrants on study visas but then help them find work.

Education courses offered outside the university system will also be checked to see if they are eligible for a student visa.

International students who have completed courses will find it more difficult to obtain permission to stay in the country to work, especially on courses where there is less demand for work.

Mr Albanese said the Covid pandemic and border closures had made migration into the country much more difficult, with this year’s higher figures trailing years when migration had stalled.

“Over the past 12 months, we have introduced reforms to put downward pressure on migration to help return net overseas migration to pre-pandemic levels,” he said in a statement to Daily Telegraph.

“Treasury forecasts show that migration is expected to fall significantly in the next financial year (2023-24).”

In May, the federal budget projected that net overseas migration would reach 400,000 in the 2022-23 fiscal year.

But former Immigration Department deputy secretary Abul Rizvi estimated the number had reached 470,000 in June and 500,000 in September, based on data on arrivals and departures from abroad.

Official data from the Bureau of Statistics has not yet been published.

The budget also assumes migration will fall to 315,000 in 2023-24.

“I would be very surprised if the government could bring the number down to 315,000. The September quarter is already very strong. Things are starting to change, but very slowly,” Mr Rizvi told the Financial Review in October.

A huge number of students are stimulated by international students. The group reached $21.3 billion in revenue in the first half of 2023, its highest ever, according to ABS data.

But while universities and colleges make huge profits, ordinary Australians find the cost of living increasingly tough, especially in the rental market.

Economist Chris Richardson, who has worked for Australia’s Treasury Department and the International Monetary Fund, said “housing affordability is worse than ever” and limiting immigration “for the time being” may be the best way to ease the crisis.

In a recent column for Australian Financial Review– Mr. Richardson wrote that while migration was exacerbating the problem, the underlying cause was the fact that “our over-regulated and expensive (housing) supply has sharply reduced demand.”

“While a strong influx of migrants may make a lot of sense, Australia’s growing failures in all the other policies that should accompany it mean we are in a hole,” he wrote.

Mr Richardson explained that a major bottleneck in housing development is that every housing development – from a single house to a subdivision or block of apartments – must be approved by local councils.

“The decades of stupidity we have chalked up in housing development have been as simple as local councils saying no to things they should have said yes to,” he wrote.

“And in the few cases where councils do say yes, the conditions attached impose huge costs on our construction sector.”

In New South Wales alone, state government data shows municipal development approval deadlines have been missed when housing supply is desperately needed.

This financial year, councils have taken an average of 111 days to decide on an application, compared to 83 days in 2021-22.

This is despite building plans submitted to NSW councils falling by 20 per cent over the same period from 81,158 to 64,980.

Sydney and Melbourne will need to build at least 1.3 million more homes over the next 18 years to accommodate an additional three million residents.

Mr Rizvi said immigration was likely to already peak, with 120,000 workers on the 408 Covid visa, which the government stopped issuing in August, set to leave the country when it expires over the next 12 months.

Fiscal year 2023-24 also saw an 80 percent reduction in the number of government professional and regional visas compared to the previous year.

The new measures, to be announced on Monday, will lead to further reductions in numbers.