CANBERRA, July 21 (Xinhua) -- The Australian government is preparing to direct a larger percentage of the country's migrant intake to rural areas.

The new policy, being developed by Prime Minister Malcolm Turnbull, would seek to ease the impact that rapid population growth has had on major cities such as Melbourne and Sydney while stimulating growth in regions where it has stagnated.

It comes as the government finds itself divided over immigration policy and whether the migrant intake should be reduced or allowed to grow.

Former Prime Minister Tony Abbott has suggested cutting the annual intake by 80,000 but Treasurer Scott Morrison warned that doing so would cost the national budget 5 billion Australian dollars (3.71 billion U.S. dollars) over the next four years.

MPs from major cities largely side with Abbott amid concerns that the population growth, half of which can be attributed to migration, is adversely affecting the quality of life.

One of the major challenges faced by Turnbull is how to convince migrants to stay in regional towns once they arrive there.

Christopher Pyne, a member of the government's inner sanctum and minister for defence industry, on Friday conceded that population was a "tricky" issue for the government.

"We have a continent the size of the U.S. yet we have 25 million people versus their over 200 million people," he told Sky News.

"I feel like we can take more people in Australia and we have an obligation in many cases to do so.

"The management of population is all about infrastructure, it is about water, it is about local, state and commonwealth governments making the right decisions.

"People in Sydney and I'm sure Melbourne have quite a different view to the growth of the population than people, for example, in Adelaide or Hobart or the Northern Territory, or North Queensland where they welcome more migrants and growing populations."