Privatising Australia's visa processing systems will cause a blowout in application times for foreigners hoping to become Australian citizens, Labor senator Helen Polley said.
The federal government is planning on outsourcing the processing of visa applications to a private company, with a range of large businesses putting their hands up for the job.
The tender is expected to be finalised this month.
But senator Polley said she knows of Tasmanians who have already been waiting for more than five years for clarity on if they can become Australian citizens.
The average wait time for visa processing is 410 days, up from 167 days in 2013.
"Privatising our visa system will lead to increased costs of visas, greater risks of worker exploitation, data security breaches and will make protecting national security more difficult," she said.
"Do we really want our visa system being outsourced? Do we really want our migration policy being determined by private companies?
"To make matters worse, LNP backroom dealer, Scott Briggs, a close friend of Scott Morrison and a former colleague of Immigration Minister David Coleman - is a major investor in one of the bids to win the contract worth more than $1 billion."
Called Global Digital Platform, the first visas from the new system could be issued in the first half of 2021.
Federal Bass MHR Bridget Archer could not be reached for comment by publication time.
However, the Department of Home Affairs has previously said the new platform will "provide a seamless digital user-centred application experience for visa applicants, sponsors and employers that will maintain Australia's national security and support economic growth".