Citizenship should not be handed out automatically just for ticking time-based boxes. It must be earned through real-world, demonstrable qualities.
This includes basics like high-level proficiency in written and spoken English, tangible work related skills, and meaningful involvement in the community.
While values-based requirements can be subjective, but a demonstrated commitment to Australian patriotism, respect for the culture, the equality of men and women, religious tolerance, political differences, and core Western values must be non-negotiable.
These are just some ideas, but would mostly depend on the overall expectations of the community at the time.
Personally I think having citizenship as a goal for those that truly aspire to be a part of the country is in the national interest, but it shouldn't be a given.