For the last four years, Labor has been vowing to cut back the number of 457 visas granted in a bid to protect local jobs.
Now Prime Minister Malcolm Turnbull has announced he'll do it first.
"So we have and we always will be an immigration nation but we must ensure that the foundation of that success is maintained and the foundation is that our migration system is seen to work in the national interest."
In promising to give Australians priority for jobs currently open to overseas workers, Mr Turnbull also quoted former prime minister John Howard's 2001 election promise on border security.
"Believe me, we should not underestimate either our success as a multicultural society or the fact that our success is built on a foundation of confidence by the Australian people that it is their government and their government alone that determines in the national interest who comes here and the terms on which they come and how long they stay."
The Prime Minister says the new visas will cut the present list of eligible occupations by about 200.
"So this is a very substantial reduction in the list of skills that qualify for these visas. There'll be a two year visas, and a second visa for four years, that will require two years prior work experience - not the case at the moment. It will require, in the case of the four-year visa, a higher standard of English. It will require a proper police criminal record check, which is not the case at the moment. It will require in almost all cases, in the majority of cases, mandatory labour market testing - again a very significant change."
He says some 95,000 457 visa-holders will be able to remain in Australia under their current visa conditions.
Immigration Minister Peter Dutton says the change is an attempt to clean up Labor's mess.
"Labor presided over a policy which got out of control, by their own admission, and what we are doing is making some significant changes in abolishing the program but also introducing a temporary skilled shortage visa through two streams, one a short-term and one a medium-term, and by doing that we restore integrity to this visa program."
Earlier the Turnbull Government had seized on figures showing Opposition Leader Bill Shorten approved almost 70,000 457 visas when he was Employment Minister in the Gillard/Rudd governments.
Bill Shorten says there was a mining boom when he was minister that required an unusually large influx of temporary skilled workers.
He said he'd stand by Labor's pledge to tighten up on companies hiring imported staff.
"We want Australians to have a chance to get first go at these jobs. That's why we want to rescue TAFE, we want to ensure that more workers are being employed and we also want to crackdown on dodgy visas. This government is trying to distract everyone from their current record. They have been the government for four years. We have got 1.13 million people who are under-employed and not getting enough hours of work. We have seen the scandals of 7/11 and other rip-offs of foreign workers and we have got a lot of Australians saying they would like to get more work and instead it's going to temporary foreign labour."
The Australian Bureau of Statistics says primary visa applications dipped by 3.5 per cent last year, while the number of primary 457 visa-holders in Australia fell from almost 104,000 to just under 95,800.
Almost a quarter of the 457 visa-holders came from India, and 19 per cent from the United Kingdom.
Opposition MP Matt Thistlewaithe says the Liberal party can't take credit for the drop, which he says is the result of Labor's policies when it was in power.
"And the number one change that we made was proper labour-market testing. So you had to test the domestic market before you could intorduce 457 visa workers. And as a result of those reforms, as a result of those legal changes, the numbers fell. Now because employment is a lagged indicator, the numbers have fallen since that time, and into the period of the Turnbull government. So the fact is that it was Bill Shorten that put in place these changes that have seen the reduction in the numbers."
