The Turnbull government has reacted to increasing pressure from Labor and One Nation by scrapping the 457 visa program for temporary foreign workers, and replacing it with a tighter regime.
The decision has been welcomed by employers but dismissed as "tinkering at the edges" by trade unions.
"We will no longer allow 457 visas to be passports to jobs that could and should go to Australians," Prime Minister Malcolm Turnbull announced on Tuesday.
Hours earlier Opposition Leader Bill Shorten demanded to know what the government was doing about the number of foreign workers even though the annual intake is at a four-year low of 96,000 - well down from the 126,300 high when Labor was in power.
The 457 visa will be replaced initially by a new temporary two-year visa specifically designed to recruit the "best and the brightest" in the national interest, Mr Turnbull said.
While Australia was a successful multicultural immigration nation it was time to put Australians first.
"The fact remains Australian workers must have priority for Australian jobs."
Under the government's plan the list of 650 occupation classifications that qualify for a temporary visa will be reduced by 200.
The new visas will require applicants to have previous work experience.
A second four-year visa will require a higher standard of English language skills as well as a proper criminal check.
The new system would be "manifestly, rigorously, resolutely" conducted in the national interest to put Australian jobs first, Mr Turnbull said.
Immigration Minister Peter Dutton said the new two-year visa would not allow permanent residency.
Anyone now in Australia on a 457 visa would not be affected by the new arrangements.
"They will continue under the conditions of that visa," Mr Dutton said.
Mr Shorten slammed the plan, tweeting: "Make no mistake, the only job Malcolm Turnbull cares about saving is his own."
One Nation leader Pauline Hanson took some credit for the policy change.
"The government will deny their tough talk on immigration and plan to ban 457 visas is because of One Nation but we all know the truth!" the senator tweeted.
Mr Turnbull said Mr Shorten, as employment minister in a Labor government, was the gold medal winner of issuing 457 visas.
"The fact is that Bill Shorten likes to talk about Australian jobs, but whenever he's had the opportunity in government to protect them, he's failed them."
The Australian Chamber of Commerce and Industry said restructuring the program would make it more sustainable and provided a chance to hit the 'reset button' on temporary skilled migration.
It would also give business the confidence to continue to access skills from overseas workers.
"Australian businesses need access to skills in order to grow," acting chief executive Jenny Lambert said in a statement.
"Public confidence in the skilled migration system is vital, and this announcement will help to achieve that confidence."
The National Farmers Federation said the demise of the 457 regime was not disastrous for the farm sector.
That's because the program did not recognise many of the skills farmers required, largely because many occupations had skill levels classified too low to meet the required threshold.
But the NFF wants to hear more details before backing the government plan.
Deputy Prime Minister Barnaby Joyce said there were still jobs in regional areas that Australians did not want to "whether it is packing offal in an abattoir or boning out skulls".
Unions NSW secretary Mark Morey dismissed the new arrangements, saying it's unlikely there will be any real change,.
"What we really need is a root and branch review, so that migrant exploitation and wage theft is properly tackled and Australian standards are both maintained and improved."
© AAP 2017