"What we are planning to do is to get our immigration levels to those which we believe are economically, environmentally sustainable," Liberal party leader Tony Abbott, 53, was quoted by the local media as saying.
"We need an immigration programme which can be supported for the long-term," he said as his party campaigned hard for the August 21 polls in which it will take on the ruling Labour.
On whether that meant cutting the nation's international student intake, he said "I am all in favour of Australia selling education. But what I don't want us to be doing is selling immigration outcomes in the guise of selling education."
Nearly one lakh Indian students are currently pursuing education in Australia and the move to cut the immigrants' number, even in the international students' category, is expected to have an impact on the youths from the country aspiring to come here.
"A 'fair dinkum' debate about population can't avoid immigration because that's what's driving the increase," Abbott was quoted as saying by 'Herald Sun'.
"Three hundred thousand is just not sustainable," he said, adding the plan to slash the number was separate from the asylum-seeker issue.
However, Abbott said skilled migration programmes would continue.
"We will maintain, though, various employer-nominated categories because it's important that business has the skills as a people that it needs," he said.
Abbott, who was born in London, said he was a migrant himself.
"The (opposition) coalition parties are pro-immigrant parties but it's very important that our immigration programme has the support of our people and that is what this policy is designed to do."
Population growth, which is now 2.1 per cent, would be reduced to 1.4 per cent, the average growth rate for the past 40 years, by the end of the next term of Parliament.
Opposition immigration spokesman Scott Morrison said this would involve cutting net overseas migration from almost 300,000 in 2008-09 to 170,000 in three years.
"Fuelling population growth today must not rob future generations of the quality of life and opportunities we enjoy in the future," Morrison said.
"We believe Australians are looking for payment up front on infrastructure and services before they will support a higher population growth," he said.
Morrison said the Coalition believed that while Australia was a nation of migrant success stories, "these do not justify a population blank cheque for the future".