The new "global digital platform" will process 90 per cent of all visa applications when it is rolled out in 2021.

Two consortiums are bidding to design and run the new system - one that is led by Liberal Party heavyweight Scott Briggs - although Labor has called for the ACCC to intervene in the tender.

Victorian Labor MP Andrew Giles said 2000 jobs had been put at risk because of the bid to "sell off our visa system".

"We have massive blowouts at the moment in wait times for people applying to be Australian citizens, with over 220,000 people waiting," Mr Giles said on Monday.

"At the same time, this third-term government is embarking upon a dangerous folly to outsource visa processing. But Australians don't want this system sold off, they want to see it fixed. And they especially don't want to see it flogged off to one of the PM's mates."

ACT Labor MP Andrew Leigh likened the new system to the computer algorithm used by Centrelink to identify overpayments.

"The government that brought you robo-debt now wants to extend the automation of visa processing," Mr Leigh said.

But Liberal MP Julian Leeser said the motion was "Mediscare redux".

"Visa decision-making - let us be very clear - is not being privatised," Mr Leeser said.

"What's next? They will accuse us of faking the moon landing or putting fluoride in the water for mind control.

"If you believe the Labor Party, you'd believe Harold Holt was taken by a Chinese sub and that the US government is reverse engineering alien technology at Area 51."

The Home Affairs department has previously ruled out job cuts because of the new system.

Staff instead would be freed up for more complex cases, the department said.