Citrus Gall wasp is an Australian native wasp with native host plant being finger limes however it has adapted well to cultivated citrus.
These wasps are very hard to spot at only 2.5mm long.

In spring females lay eggs in new branches, the eggs hatch and burrow into the bark.
The tree responds to this attack by increasing tissue around the site creating unsightly galls.
The larvae pupate usually during winter and emerge as adults in early spring.
Adults are poor flyers and usually mate quickly after emerging, often laying eggs on the same tree.

Heavy infestation can cause die back but most healthy well fed and watered trees will recover.

Control
* Remove larvae before they emerge as adults.  Removal of galls needs to be done by the end of August before the adults emerge. It is best to be vigilant all year round to avoid removing large sections of tree in one hit.
* If the galls have holes in them then they do not need to be removed. The holes are created by the adult wasps as they emerge.

There are a number of ways to remove , as listed below:
1. Galls can be pruned off and burnt or put into plastic bags and sent to landfill. Avoid heavy pruning during winter as it will promote soft new sappy growth in the spring, which is prime egg laying material. sgaonline.org.au/citrus-gall-wasp

2. Use a potato peeler (or knife) to expose larvae ***this may scar the tree and leave a lumpy brach. Gardening Australia has a great clip explaining this method Gardening Australia – Gall Wasp

3. Coating galls with sticky product such as Tree Guard may also be worth trying. As adults try to emerge they are trapped by the sticky paste preventing them from going anywhere.

Prevention 
– Avoid high nitrogen feed during winter and early spring which will promote large amounts of soft new growth. Feed small amounts more frequently.

– Overhaul is a kaolin clay that is be sprayed on the tree. It is hypothesised that the clay works in a variety of ways depending on the insect: repelling, reducing egg laying, impeding grasping, restricting movement, altering behaviour, inducing paralysis and mortality, and camouflaging the plant. Whichever way it works, trials by the NSW Dept. of Agriculture in the Riverland and Sunraysia have found it significantly reduces the incidence of galls (from Citrus Gall Wasp) in their citrus trees. Both number and size of galls are reduced (70-90%)..  BAAG-overhaul-gall-wasp-treatment.

– Yellow sticky traps can be hung in the tree when the gall wasps are flying and laying eggs in spring (the drawback of these traps is that they will trap the good bugs as well as the gall wasp).  *Please note it is now illegal to use exposed sticky traps in Victoria; they needs to be placed in a cage that will prevent small birds and bats getting stuck in them.