Migration Model Background

The benefit side

A well-selected permanent program can raise labour supply, fill specific skills gaps, add tax revenue, and support export industries such as international education. Treasury's long-run modelling is useful here because it separates fiscal and GDP effects by migrant stream rather than treating every arrival as identical.

The simulator therefore gives weight to skilled-primary places and faster recognition of overseas qualifications. That does not imply family migration has no value; it keeps the measurable economic channel separate from social, humanitarian, and community goals.

Fiscal NPV and cohorts

NPV means net present value: a future stream of taxes paid and services used, converted into today's dollars. A cohort is the group being assessed together. Here, the permanent cohort means one annual permanent-program intake.

The formula is deliberately transparent: weighted lifetime fiscal value per migrant multiplied by permanent places. The weighted value uses the skilled-primary share, an assumed skilled-secondary share inside the Skill stream, and the remaining Family stream share.

The pressure side

Population growth becomes politically and economically fragile when it outruns housing delivery or concentrates heavily in already constrained cities. A national fiscal dividend can coexist with renters facing a local supply shock.

The model translates NOM into an estimated dwelling requirement and compares that with an annual homes-completed lever. It also treats student load, capital-city concentration, and total volume as pressure signals.

NOM, tourists, and temporary visas

Net overseas migration is not the same as border crossings. ABS uses the 12/16-month rule, so a temporary visa holder can count if they become a usual resident for migration measurement, while a short tourist visit does not count.

This matters because NOM is the simulator's population-pressure lever. It captures durable residence change, not every border crossing.

Visa pathways and bottlenecks

Migration is a stock-flow system, not a set of separate pipes. Students can move to graduate or other temporary visas, temporary skilled workers can move to permanent residence, permanent residents can become citizens, and some people leave before any of that happens.

That matters because a smaller permanent program does not automatically mean less temporary pressure. If many people are already onshore and fewer permanent places are available, more people may remain temporary for longer. TAMM does not run a full multistate projection, but it treats student arrivals, permanent places, skills use, and NOM as linked assumptions rather than moral labels.

Onshore, offshore, and the PR milestone

Permanent residence is not always the final step of a long onshore visa path. In 2024-25, Home Affairs recorded 101,022 Migration Program outcomes for people who were in Australia at the time of application and 83,979 for people outside Australia. That is roughly a 55/45 split overall, with the Skill stream more onshore and the Family stream more offshore.

The distinction is important: location at application is not the same as a full life history. Some offshore applicants may have lived in Australia before, and some onshore applicants may have short or unusual pathways. But it confirms the basic point: permanent residence is neither all brand-new arrivals nor all people converting from temporary visas.

From a NOM and housing-pressure perspective, that split matters. Onshore applicants are usually already living somewhere, spending money, and often working or paying tax before the permanent visa is granted. Offshore applicants are more likely to create a new arrival and settlement event, although the timing is not identical to the grant date. Permanent and provisional visa grant material includes a specified first-entry arrival date, and Home Affairs guidance for offshore permanent visas commonly describes that date as generally 12 months from grant. The practical lag between grant and arrival can be meaningful: 6-9 months is a plausible scenario assumption, not an official average. From a broad housing-pressure perspective this mostly shifts timing rather than changing the multi-year demand total.

In the lived migration journey, permanent residence is often the main milestone. It usually resolves the hardest uncertainty: the right to remain indefinitely, build a life, work and study, access Medicare, and later apply for citizenship if eligible. Citizenship by conferral still requires an application, residence eligibility, character checks, and usually a test and ceremony. For many settled permanent residents, though, it is more of a formal capstone than the main selection contest.

International education exports

ABS records education-related travel exports as an annual balance-of-payments value. The $53.6B baseline is an economy-wide annual export number for 2024-25. It includes $23.5B in tuition fees and $29.9B in goods and services.

The denominator is the active student stock, not new arrivals. The Department of Education counted 551,717 international students studying in Australia in January 2026, which makes the baseline roughly $97k per active student per year. The student lever uses a dampened relationship, because a change in new arrivals does not instantly resize the whole sector.

Stress testing the settings

At low NOM and high building rates, the simulator tends to show capacity improving faster than demand. At very high NOM, even a strong skills mix can be overwhelmed by housing and city pressure unless construction also lifts.

These settings are not predictions. They show which assumptions are carrying a scenario, and where the trade-off changes direction.

What this is not

This is not a full macroeconomic model, a population forecast, or a ranking of visa categories. It is a transparent policy simulator designed to expose trade-offs and make the assumptions easy to challenge.

It also does not score cultural change. Migration can enrich national life and strengthen communities, but culture, identity, and social cohesion are not well represented by a single numeric slider. TAMM keeps those questions separate from the measurable economic and capacity channels.