Australia’s annual intake of permanent migrants has fallen to the lowest level since 2007 under the leadership of the Turnbull government, the latest migration data reveals.

Despite the cap remaining at 190,000 in the last financial year, the actual intake fell to 163,000.

Australia took in 20,000 fewer permanent migrants than in the previous financial year, mostly thanks to a 12,000 cut in skilled visa places and an 8,000 cut in family visas.

Business groups have responded with shock and disappointment, with the Australian Camber of Commerce and Industry describing the fall in skilled migration as a "crisis", particularly for regional employers.

The plunge in annual numbers was already anticipated, after Home Affairs officials told a Senate inquiry there had been a substantial reduction in the intake of skilled migrants and their families, due to tougher vetting procedures using new database technology.

"We’re not going to allow people in where there’s a fraudulent application, where there’s dodgy information being provided," Mr Dutton told reporters in Queensland on Friday.

"If you are bringing people in, like Labor did, that don't have the proper qualifications, that don't have the documentation that satisfies the examiners within my department, if they're worried about fraudulent documentation, those outcomes are not going to be productive for the economy."

The latest figures for the 2017-18 financial year, which ended on July 1, show the skilled stream fell by 12,468 places to just 111,099 this year.

But the largest fall in percentage terms was in the family stream, which was cut by almost 15 per cent to 47,732 places.

Questions over 'vetting' process

SBS News understands the Home Affairs department has been ramping up its use of data-matching technology to cross-reference visa applications with other information on applicants held by Australian agencies.

Mr Dutton and his department said improved vetting procedures were largely responsible for the drop.

But Abul Rizvi, a former deputy secretary in the Immigration Department official who helped oversee Australia's visa program from the 1990s to 2007, said it was "rubbish" to suggest vetting was not thorough when the intake was higher.

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"There is no reason that the program can't be delivered at that level. I ran the migration program for over 12 years, and it was always possible to deliver the program ... with integrity, because we were able to identify those where there were fraudulent documents," Mr Rizvi told ABC News.

"That's always been the case, and they were always able to be weeded out."

Earlier in the year the trade union movement and the Australian Industry Group, a peak employers body, joined together in an unlikely alliance to urge the government to keep the intake around 190,000.

The drop also follows a fractious internal debate within the Coalition about whether to cut the cap - led by former prime minister Tony Abbott, who wanted it reduced to as low as 110,000.

AAP

Labor's Albanese says cuts a 'good result'

Labor frontbencher Anthony Albanese said the drop was a "good result".

"Of course it's a good result, if there is more integrity in the system," he told Nine's Today program on Friday morning.

"This is, bear in mind, a drop of 20,000 on the government's own figures last year," he said.

"They have been in government for five years. If they have toughened up the system which they themselves were in charge of, to ensure more integrity in the system, then of course that's a good thing."

Labor leader Bill Shorten said the government had created an "underclass of low-paid workers from overseas", but said the Coalition should "realise that some level of immigration generates economic growth in this country".

Australia has cut permanent immigration to LOWEST level in 10 years.



Yes, 3 of the "peak" years were under Rudd/Gillard/Rudd, but 3 more were under Abbott/Turnbull.



Here's my chart of immi data since 2005, w/ PM of the day.https://t.co/4y6PnW3bgw@SBSNews #auspol pic.twitter.com/y5UDZncvrm — James Elton-Pym (@JamesEltonPym) July 12, 2018

The figures were released to The Australian newspaper and are yet to be uploaded to the government’s published migration statistics.

Intake lowest since Howard government

The intake of 163,000 is the lowest since 2007, when it was just under 159,000.

Australia’s rate of permanent migration has been capped at 190,000 since 2011.

AAP

Nearly every year the cap is met, but in the previous 2016-17 financial year, the intake dipped to 183,000. The government has no obligation to fill the quota.

The 190,000 places cover permanent visas for workers and their families. The humanitarian intake of refugees is calculated separately.

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But the figure does not tell the whole story of Australian immigration.

The country’s “net overseas migration” statistics, known as the NOM, track the flows of people in and out of the country.

It includes those who enter the country on temporary visas, including temporary working, student and tourist visas. It also includes Australians who leave the country or return home after time overseas.

Earlier in the year, the Home Affairs department estimated 511,900 people would have arrived in Australia by the end of the financial year.

Minus the 286,200 people who leave, and Australia should be left with a “net” migration of 225,700.