Even 1.5 million was still too many, he said.

"The intake of foreign students needs to be reduced."

Mr Tehan came out against "pursuing a big Australia" but wouldn't answer whether that meant targeting a lower population overall.

The Liberals' policy, to be unveiled before the election due next year, would bring immigration back to what Mr Tehan branded sustainable levels.

"Understanding you have to be able to deal with housing and rents, rental vacancies at the moment are at the lowest ever, it's driving up rents, adding to inflation," he contended.

Home Affairs Minister Clare O'Neil and Immigration Minister Andrew Giles are working to streamline the immigration system.

People couldn't stay as long as they wanted in a sustainable migration system and the government needed to ensure people left when their visas expired, Ms O'Neil said.

Mr Giles released a migration strategy in December to reel the system back in to "sustainable levels" by cracking down on non-genuine students and others exploiting the system.

Labor has also pointed to a one million visa processing backlog from when they came to power.

"The Liberals are completely incoherent when it comes to this important policy area," Mr Giles told AAP in a statement.

"They have no solutions, no policies and will do and say anything for political gain."

The government boosted the permanent migration cap to almost 200,000 in response to the jobs and skills summit in 2022 in a bid to address worker shortages.

Migration numbers needed to be higher, Opposition Leader Peter Dutton agreed at the time.

But he warned a plan was needed to ensure migration was sustainable when it came to service delivery, including housing.

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