By keeping out economic migrants, it frees up more places for genuine refugees. In Australia's case, 12.000 places have been freed up that wouldn't otherwise have been there when there was a free for all under the policies in place when Labor dismantled our border protection set in place by a previous government.
That would only be true if there was a hard physical limit to the total number of entrants to the country.
While there presumably is some physical limit, it is currently dramatically higher than the actual population of Australia; and is most likely somewhat higher than the total world population.
So your point is invalid.
We could easily admit 12,000 refugees, whether or not we had previously admitted 100,000 or 1,000,000 non-refugees.
Indeed, between 1945 and 1965 we admitted around 2 million people. And our country boomed.
Then in the 1970s we admitted 70,000 refugees from Vietnam alone.
12,000 places are available whether or not we bring in a bunch of other people.
There is no shortage of 'places', that need to be freed up; We have one of the lowest population densities in the entire world.
This is a continent, not a fucking phone booth.