As an immigrant to (and citizen of) Australia myself, I find it pretty appalling how hard it has become to become a permanent resident in Australia even if you are reasonably skilled (and the fact that permanent residency requires nomination by an employer -- which is unlike most other countries, where permanent residency is based on your own residence and skills). The work-based streams are becoming more and more narrow and it's longer the case that studying in Australia gives you any guaranteed pathway to residency (and I would argue it hasn't been the case for a fairly long time now).
[+]: A quick look at the EOI statistics <https://api.dynamic.reports.employment.gov.au/anonap/extensi...> shows that 7.2% ((LODGED+INVITED)/SUBMITTED ~= 7.2%) of people who register their interest end up being invited.
That's pretty much how it's done in Australia. It props up a massive industry (education was the fourth largest export in 2018-2019) whilst ensuring a supply of qualified applicants for residency.
Prices for locals are still set by the government. So, whilst there is inflation, disadvantage to locals is limited to there being fewer places available to them. Whether it's morally okay is another question but the economics seem to work out pretty well.