Treasurer Scott Morrison has played down concerns about the fall in Australia's migration rate, saying it simply reflects demand.
The 2017/18 migrant intake fell by more than 10 per cent to 162,417, well below the 190,000 cap set by the government.
Business groups have expressed concern about the decrease and support among some politicians for a lower migration figure, with Liberal backbencher Dean Smith calling for a year-long Senate inquiry into Australia's population.
But Mr Morrison said the migration system is "working as it should".
"If there were applicants, and they met the requirements, then they would have visas, because the cap wasn't met," the treasurer told Fairfax Media on Tuesday.
He said the gap between the ceiling and migration showed demand was within the cap.
"That would suggest to me the program is operating and the policy is working as it should," Mr Morrison said.
Greens MP Adam Bandt can't see any reason for a parliamentary inquiry into population.
"I don't think that setting arbitrary targets about population is the right way to go," Mr Bandt told ABC radio.
He said reducing waste and improving public transport would do more to improve Australia's impact on the plant than reducing migration.
