PM backs 'right kind of migration' in system overhaul

Australia's population will be smaller than predicted by the former federal government with proposed changes to attract "the right kind of migration", the prime minister says.

Prime Minister Anthony Albanese has been questioned about the impact on a strained housing sector amid an uptick in international students arriving to Australia. 

"There are 60,000 students from China enrolled in Australian tertiary institutions, that's a good thing, that creates jobs and economic activity," he told reporters in Tasmania on Saturday

The impact of the pandemic on international travel means many of those students have been studying remotely.

"Normally there would be 60,000 coming and 60,000 going, what's occurred here is there's just 60,000 coming because they've all been doing their courses online," he said.

"The migration to Australia is still ... much lower than it would have been and was predicted by the former government."

The prime minister was in Tasmania to announce funding for a new waterfront stadium, and was heckled about priorities amid cost-of-living pressures.

"People don't need a stadium", someone interrupted with off-camera during the press conference. 

Affordable housing would be part of the Hobart development, Mr Albanese said.

"Why shouldn't someone in social or affordable housing have access to this unbelievable view right here in this great city of Hobart?" he said.

Questioned on whether migration changes will mean "a big Australia by stealth", Mr Albanese said the population would be less than predicted.

"There's been a pandemic, that meant the borders were closed, that meant people weren't coming in," he said.

"If you look at the measures ... it will actually mean less migration than was envisioned, but it will be the right migration, the right migration that makes the right contribution to the country."

Under a major overhaul of Australia's "broken" system, wages for temporary skilled migrants will be raised by about $16,000 and thousands will be eligible for permanent residency.

Home Affairs Minister Clare O'Neil announced the reforms in a National Press Club address on Thursday.

"These two changes show we're serious about the reform agenda ahead," she said.

"We are a truly great country with a fundamentally broken migration system, so just imagine what we will be able to achieve when we get this powerful engine working again in the national interest."

A review found the migration program "not fit for purpose", failing to attract the most skilled people and not giving businesses efficient access to workers.