After three years in the productivity portfolio, Macphee replaced Michael MacKellar as the Minister for Immigration and Ethnic Affairs. Fraser and MacKellar had already adopted the recommendations of the Galbally report, which led to a new framework for migrant settlement. Macphee, with the full support of Fraser, continued the pace of reform, allowing large numbers of Indochinese refugees into Australia and he also introduced a family reunion scheme for these refugees. Macphee was assisted by receiving full bipartisan support from the shadow Immigration Minister Mick Young.