Treasury modelling puts the federal budget in deficit for more than a decade under One Nation's proposed migration cuts, with accumulated borrowings projected to rise by an additional $275 billion over that period. A decade-long modelling exercise drawing on Parliamentary Budget Office methodology lays out the economic and fiscal trade-offs tied to lower immigration intake, arriving as parties across the political spectrum face voter unease over migration levels.

The modelling projects that a three-year net reduction in migration under Pauline Hanson's proposed policy would trim Australia's gross domestic product by $212 billion through the mid-2030s, a period when the workforce would hold roughly 820,000 fewer contributors to the tax base than under current settings.

Mathias Cormann — who held the finance portfolio under the Coalition before taking the helm at the OECD — told a Saturday gathering that hard caps on migration numbers, set without any reckoning of their downstream effects on industries, healthcare delivery, and universities, rest on shaky analytical ground. He went on to observe that a country simultaneously grappling with an older demographic profile, a tightening labour pool, and government commitments to heavier spending on health services, aged care, and defence had not yet put forward any clear account of how those competing pressures might be brought into balance. In remarks delivered from a podium, he described the position as one that contained an internal contradiction.

Modelling figures put the national debt roughly $150 billion higher over a decade if net arrivals were reduced to the intake levels the Coalition has put forward — a result that points to the balancing act the opposition faces when adjusting visa settings without adding pressure to the broader budget position.

Hospitality and accommodation operators — sectors that rely on working holiday visa holders to address workforce shortfalls — have voiced growing opposition to a government decision to place a ceiling on that visa category as part of efforts to bring down net overseas migration numbers. Public unease over the rate at which temporary visa holders have been arriving in Australia has grown, while employer groups and industry representatives caution that politicians competing to cut those numbers quickly could place the broader economy on uncertain footing.

The Australian Hotels Association entered the public debate through an AI-produced advertisement depicting services deteriorating as migrant workers were absent from cafes, aged care facilities, supermarkets, and hotels around the country. Accommodation Australia chief executive James Goodwin noted that although the industry accepts the need for migration adjustments, the burden of the planned reductions is falling disproportionately on the hospitality sector, and that a more even distribution across visa categories and economic sectors is needed. The federal government's plan to bring net overseas migration down to 225,000 involves cuts to second- and third-year working holidaymaker visas and student family visas.

Under the Coalition's stated plan, university graduates and refugees would form the initial intake pool to reach a 100,000-person admission figure, after which an expanded ceiling of 160,000 places would open up through greater reliance on skilled-worker pathways. Without detailing how that target would be achieved, the party is seeking a period of negative net migration followed by an annual cap of 130,000 arrivals, a ceiling that would still accommodate workers in regional areas.

Elevated migration intake tends to lift federal tax revenue, according to economist Chris Richardson, while placing additional expenditure pressure on state budgets. Richardson noted that no existing economic models were found to adequately account for the combined fiscal pressures migration places on federal and state budgets alongside the broader complications of housing.

The Parliamentary Budget Office hosts an interactive tool that lets members of the public construct their own spending scenarios — selecting from policy settings that include adjustments to net overseas migration — and observe how each combination would flow through federal budget projections and population estimates over varying time frames. Those projections rest on existing policy settings and carry inherent constraints, meaning any adjustments the Coalition intends to make to the migration programme fall outside what the modelling can account for.

Projections drawn from One Nation's preferred immigration targets put the national workforce roughly 820,000 positions short of where it would otherwise stand by the mid-2030s. Wage and salary receipts, corporate earnings, and consumption-based levies are all projected to feel the knock-on effect of that shift.

Forecast figures tied to current policy settings point to accumulated shortfalls of $108 billion across the coming ten years, with the budget projected to move back into surplus territory by 2034–35. Under One Nation's fiscal plan, cumulative deficits totalling $391 billion are projected across the decade ahead, with no pathway to a surplus within that period.

Wider budget gaps push total borrowing upward, with outstanding gross debt now standing at $995 billion. Projections tied to existing policy place national debt at roughly $1.4 trillion around the mid-2030s. Under One Nation's proposed reductions to net overseas migration, national debt would sit at $1.67 trillion. Under the migration policies currently in place, the Coalition's fiscal projections point to a national debt reaching $1.54 trillion.

Projections also point to a reduction of 430,000 employed workers alongside accumulated budget shortfalls totalling $262 billion, with a return to surplus projected for 2036–37. The gap between the opposition's numbers and those projections traces back to a methodological fork: the Coalition plans to reshape the mix of arrivals under the migration programme, whereas the PBO budget tool leaves that mix untouched and trims only the total intake figure.

Reduced migration intake is projected to leave a $6.1 billion gap in the Coalition's revenue picture across the four-year forward estimates period. Cutting the refugee intake by half — from 20,000 places down to 10,000 — is projected to trim $2.7 billion from government expenditure, while a proposed skilled project visa pathway is expected to bring in $3.9 billion in fiscal gains.

Those projected budget gains — $260 million across four years and $2.5 billion over ten — come from a Parliamentary Budget Office analysis that the Coalition has not released publicly, with only the headline figures made available.

Richardson noted that younger migrants with advanced skills tended to produce the most favourable outcomes for both the budget and the broader economy, though he added that adjusting immigration settings was far from straightforward. In his assessment, efforts over recent years to reduce migration volumes had demonstrated that the policy levers do not respond quickly. Whatever direction any party might wish to take, he said, the architecture underpinning migration had grown into something resembling a supertanker — a vessel not built for sharp or rapid turns.

A representative for Coalition leader Angus Taylor described One Nation's approach as disorganised, while also contesting the view that the government had leaned on migration to shore up its budget position — asserting that the Coalition held the capacity to bring migration numbers down without placing the broader economy at risk.

Speaking at the Centre for Independent Studies in Brisbane on Saturday, Cormann noted that community unease over immigration levels had grown — driven in part by housing shortfalls — while arguing that reducing immigration numbers was not the appropriate response, adding that the underlying concern itself had merit. The former cabinet minister, who served across three consecutive governments, argued that addressing the conditions driving population growth — housing supply, infrastructure, public services, and the makeup of migration intake — offered a more workable path than simply reducing overall numbers, adding that a shrinking workforce could not simultaneously sustain expanded hospital networks, aged care, pension obligations, and defence commitments.

He stated that the financial burden of those commitments falls on somebody, and that cutting back alone would not resolve the underlying tension. Proponents of that view contend that without expansion of the economy, no viable route toward addressing the underlying problem exists.