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A report by the Immigration Department shows Australia's population reached 21 million in June last year.
About 50,000 skilled workers migrated here in the past financial year, while a record number of people left the country.
Immigration Minister Chris Evans says the high levels of immigration have been good for Australia.
"Fifty-six per cent of the growth that's occurring in our population is coming from immigration, that's largely driven by the demand for skills, filling the needs of the economy," he said.
"That's a good thing because they're allowing our economy to grow as they contribute to that growth and development."
Source: By Australian Broadcasting Corporation