Offshore processing of asylum seekers will cost $2 billion over the next four years.
The mid-year economic and fiscal outlook released on Tuesday said a $1.2 billion boost in funding over the forward estimates would make up for Labor's "inadequate" funding of the system.
Under the scheme all people arriving by boat will be processed in Papua New Guinea or Nauru, up from the forecast one in six under Labor.
The immigration budget will be bolstered by the coalition's move to cut the humanitarian program intake from 20,000 to 13,750 places, saving $964.5 million over four years.
Processing the asylum seeker backlog and providing temporary protection visas will cost $493.2 million over four years.
The government plans to grant TPVs for a maximum of three years, with a subsequent visa to be granted if the visa holder continues to be owed protection, the budget document said.
The same range of services provided under the Howard government would be made available to TPV holders.
Cuts to onshore processing will save the budget $858 million over the forward estimates.
Operation Sovereign Borders, which involves intelligence, police, defence and immigration officials cooperating to "stop the boats", will cost just under $210 million over four years.
