Senior opposition spokeswoman Bridget McKenzie said the government’s social compact with the Australian people that migration is good for the country has been broken by the cost of living crisis and Labor’s mishandling of the surge in arrivals since the pandemic.

Australia’s immigration policy has been hijacked by universities and big business that profit off foreign students and workers, the bureaucracy and the union movement at the expense of first home buyers, renters or people with mortgages, the Nationals senator and opposition transport and infrastructure spokeswoman told The Australian Financial Review Infrastructure Summit on Monday.

“We have, to some degree, a bipartisan approach to the economics of migration. We have a de facto population policy whereby we agree that immigration is important to the economic growth of our nation, but in the last couple of years, that compact with the Australian people has snapped,” she said.

“It is actually making real people’s daily lives worse, increasing traffic congestion and hospital waiting lists. That is the reality in our suburbs, far from the Sofitel and our regional capitals, that Australians are struggling with each and every day.”

Australia’s debate on migration needed to be refocused on regular Australians, she said.

Current policy “suits universities that have been transformed from pure education centres to business enterprises in order to survive” and Treasury officials because it masks a serious decline in productivity.

“It suits many big businesses who see immigration as a cheaper, faster alternative to seriously engaging with educating and training domestic students in order to get skilled local labour,” she said.

“And finally, it suits big unions who are happily manipulating the skills immigration list to wave in yoga teachers and dog groomers, meanwhile keeping out skilled construction workers that are so critical to get our housing sector going, our public project pipeline affordable.

“This is a discussion we have to have as a nation.”

The Albanese government has announced plans to cap the number of foreign students from next year as a way to slash net migration to 235,000 within a few years and ease pressure on the housing and rental markets. The opposition has announced plans to cut net migration even harder, to 160,000 a year.