The move was made after the government became aware of frustrations surrounding the current visa programme, Assistant Minister for Immigration Alex Hawke said.
Currently, if family members of a migrant to Australia wish to join them through a visa programme, they are put on a lengthy wait list for a permanent residency visa.
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Families or the migrants will be required to contribute to the cost of the visa, a measure which has come about after a Productivity Commission report last week found the overall cost of hosting migrants' parents would be up to $2.5 billion once welfare, healthcare and other social benefits are given to them.
Hawke said many migrants and their ethnic communities were upset at the long wait list which prevented families from being reunited in Australia.
"We want to help families reunite and spend time together, while ensuring that we do so in a way that does not burden Australia's healthcare system," Hawke added.
The government estimated that just 1,500 people migrate to Australia to join family members who were already living in the country.
The government is yet to decide on a cost for the new, five-year temporary visa program, however it expects to implement the visa from July 1, 2017.
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