Downing Street indicated it was unlikely to notably change course on its immigration plans in the wake of the report.

The migration advisory committee (MAC) was asked by the home secretary, Priti Patel, last year to research how an Australian points-based system might work.

The government is not required to accept the committee’s recommendations, although it is likely to base future immigration policy on the committee’s research.

The government has alluded to the desirability of an Australian points-based system for months, without explaining how this might work. This report gives the first assessment of whether provides a desirable model for the UK economy.

If the government wants a points-based system it should only introduce it in the route for skilled workers without a job offer, the committee concludes.

Skilled migrants who come to the UK to take up a job would be allowed to earn £4,400 less than the current £30,000 threshold, under the proposals.

The committee has recommended reducing the existing salary threshold to £25,600 to make it easier for teachers, NHS employees and people at the start of their careers to qualify. The committee proposes different thresholds depending on the worker’s occupation, with more highly paid occupations having higher thresholds.

The committee also recommends supporting a pilot visa to attract people to work in remote parts of the UK, and improved monitoring of the immigration system to allow the UK to assess whether the new system is working.

Prof Alan Manning, chair of the migration advisory committee, said: “Our recommendations are likely to reduce future growth of the UK population and economy compared with freedom of movement, by using skill and salary thresholds. We estimate very small increases in GDP per capita and productivity, slightly improved public finances, slightly reduced pressures on the NHS, schools and on social housing, though slightly increased pressure on social care.

“No perfect system exists and there are unavoidable, difficult trade-offs. The largest impacts will be in low-wage sectors and the government needs to be clear about its plans for lower-skilled work migration.

“The government should ensure that the mistakes of previous UK points-based systems are not repeated.”

He noted that the UK did have something “pretty close to an Australian points based system from 2008 and the current system has evolved away from that because of perceived problems with it”.

A No 10 spokesman said: “The government will introduce a firmer and fairer points-based immigration system from 2021 that welcomes talent from around the world while reducing low-skilled migrants and bringing overall numbers down. We will carefully consider the report before setting out further details on the new system.”

Asked if this meant the plans for a primarily points-based system would stay, he said: “As the prime minister has been clear, we will introduce our points-based system from 2021.”

An Australian system is based on points being awarded for different characteristics, offsetting strengths in one area against weakness in other areas. Currently the main way in to the UK for non-EU migrants requires you to have a job.

“We base our recommendations on what we see as being in the interests of the resident population. So we try to focus on how immigration affects people’s lives, so we have never been particularly focused on numbers, it is more … do we think they provide a benefit to the UK resident,” Manning told the BBC’s Today programme before the launch of the report.

He said it was impossible to say whether the recommended system would increase the numbers of people migrating to the UK. “That depends on how many points you give and how many points are required for entry so there is no automatic connection between points and numbers. That would be a decision for the government,” he told Today.