Cabinet minister Angus Taylor has defended the timing of cutting Australia's migration cap, arguing the debate has nothing to do with the Christchurch terror attacks.
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The government is planning to reduce the migration ceiling by 30,000 from its current level of 190,000, The Australian reported on Tuesday.
Mr Taylor told ABC radio the debate around reducing congestion was a "completely separate" issue to fears migrants have been demonised following the deaths of 50 people in New Zealand mosques last week.
The new cap would almost match the reduced 2017/18 intake of 162,417 which the government put down to new visa integrity measures.
Labor frontbencher Mark Butler said the new policy appeared to be the status quo given last year's actual intake.
"If Scott Morrison has some detail he wants to show to us or the Australian community, obviously we'd be willing to look at it," he told ABC Radio National.
A regional settlement policy would require a certain number of skilled migrants to live for at least five years in cities other than Sydney and Melbourne.
Mr Taylor, who holds the regional NSW seat of Hume, said getting more people moving out of capital cities was important.
"We have an opportunity to get more of our immigration moving to regional areas, that's something we're very focused on," he said.
Prime Minister Scott Morrison on Monday took aim at "tribalism" that distorted debate on issues like the immigration cap.
"The worst example being the despicable appropriation of concerns about immigration as a justification for a terrorist atrocity," he told an Australia Israel Chamber of Commerce function in Melbourne.
"Such views have rightly been denounced. But equally, so too must the imputation that the motivation for supporting moderated immigration levels is racial hatred.
"We cannot allow such legitimate policy debates to be hijacked like this."
Greens leader Richard Di Natale questioned the timing of the debate, which has re-emerged shortly after the Christchurch terror attack.
"Three days after a massacre the prime minister decides to land this into the national conversation," he told ABC News Breakfast.
The government will also provide incentives for foreign students to attend universities away from the two major cities, as part of its bid to reduce congestion in Sydney and Melbourne.
Australian Associated Press