Matching the skills of people who want to move to Australia to work with the skills shortages in rural and regional Australia will be the key to the success of the new approach that the nation aims to adopt, it is claimed.

According to Alan Tudge, Minister for Urban Infrastructure and Population, the way to make the policy work will be to direct new immigrants to smaller states and regions away from big cities like Sydney and Melbourne.

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Not much detail of how the new approach will work has been revealed by the Australian Government, but Tudge said in a speech at the Menzies Institute in Melbourne that one idea is to restrict skilled migrants from living in major cities for up to five years.

He explained that the success of the policy will rest on the ability to encourage those who are coming to the country initially on a temporary basis to go where there is a need for their skills and where there is a need for population growth.

'We are working on measures to have more new arrivals go to the smaller states and regions and require them to be there for at least a few years. In that time, the evidence suggests that many will make it their home for the long term,' he pointed out.

'The opportunity is to get a more even distribution of that growth which supports those smaller states and supports those regions that are looking for more people and in the process taking a bit of pressure off the big cities of Melbourne, Sydney and south east Queensland,' Tudge explained.

However, some critics of the plan say it is too vague and raises more questions than answers. Experts says there will need to be some kind of incentive to encourage people to take jobs in regions where they are needed.

Tudge also pointed out that Australia already puts conditions on all sorts of visas, and he suggested that penalties which currently apply to other visa classes, such as revocation of visas, could be extended to migrants who left regional areas.

'Net overseas migration accounts for 60% of our overall population growth and around 75% of the growth of the big two cities. Hence, settling even a slightly larger number of new migrants to the smaller states and regions can take significant pressure off our big cities,' Tudge told the audience.

'There are some constraints to this, for example 25% of our annual migration intake is directly related to an employer sponsoring a person for a job where they cannot get an Australian. We do not want to jeopardise the growth of those sponsoring businesses, and hence the wealth of our nation,' he explained.

'A further 30% concerns family reunion, typically, an Aussie marrying a foreigner. We cannot send a person's spouse to a different state. But apart from these two categories, there is no geographical requirement for a newly arrived migrant,' he added.