Opposition Leader Angus Taylor will deliver his first budget reply speech on Thursday evening, unveiling a proposal to dramatically cut the number of people allowed into the country.
It follows the loss of former Liberal leader Sussan Ley's regional seat of Farrer to One Nation at Saturday's by-election, the minor party's first lower house victory.
Speaking ahead of his budget address, Mr Taylor also said the coalition would claw back billions of dollars in savings by cutting welfare for non-citizens.
The National Disability Insurance Scheme would be for Australian citizens only, he said.
"We have got, right now, a government that is slashing support for private health insurance for older Australians and at the same time dishing out billions and billions of dollars to people in this country who are not citizens. for welfare," he told reporters in Canberra.
"That's not fair on hard-working Australian citizens. That's not fair on people who have committed to this country for many years ... and the simple principle is this: if you commit to this country, we'll commit to you."
One Nation leader Pauline Hanson said the by-election loss had led the coalition "to finally see the light" and copy her party's policies.
"While they've been telling everyone that One Nation has no policies, they've been reading them very carefully because they're desperate for some good ideas," she said.
"The cosy two-party system protecting two tired, clueless and unpopular major parties is on borrowed time no matter how much they wish it was otherwise."
In his speech, Mr Taylor will say Australia should only bring in as many people as it can house.
Under his plan, a limit would be placed on net overseas migration, equivalent to the number of homes built in the previous year.
Net overseas migration is the difference between the number of people arriving in Australia and the number of departures, and also includes temporary migrants like foreign students.
Tuesday's budget forecasts the figure at 295,000 for the current financial year, dropping to 225,000 in 2027/28.
That's well below the post-pandemic high of more than 550,000, when a flood of migrants re-entered the country as borders reopened, but still higher than pre-COVID levels.
In the 2024/25 financial year, about 175,000 new homes were built.
Mr Taylor's budget reply speech sets up a fight with Labor over housing policy, after the federal government revealed plans to scrap tax concessions for property investors in a bid to help more young people buy a home.
Labor minister Clare O'Neil said housing was a complex issue but migration was only one piece of the puzzle.
"If you think you can solve Australia's housing challenges just through the migration system, you've got rocks in your head," she told ABC TV.
"That is a completely piecemeal approach to what is a big and complicated challenge facing the country."
Greens deputy leader Mehreen Faruqi slammed both Labor and the coalition as they "pander" to One Nation policies.Â
"It is pathetic that the Liberals are willing to sink so low trying to out-racist One Nation," she said.
"Newsflash for Angus Taylor, migrants are entitled to the same safety net as everyone else."
Opposition home affairs spokesman Jonathon Duniam denied the policies in the budget reply were anti-immigration.
"Anti-immigration is when you can't cater to the people that come here," he said.
"I'll tell you what's anti-immigration: not building houses for people to live in in Australia."
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