Turnbull's plan will replace 457 visas initially by a new temporary two-year visa specifically created to recruit the "best and the brightest" in the national interest.
Mr Turnbull debunked Labor's argument the mining boom was responsible for a spike in the number of foreign workers during Opposition Leader Bill Shorten's time as employment minister.
The Queensland MP previous year argued for action on the 457 visa scheme, saying he wasn't afraid to stir things up if his colleagues failed to restrict the program.
"We still hear different employers that often they do take on unskilled migrant workers because they can't get jobs by local people, so they're happy to take on migrants just to fill a shortage", he said.
The numbers of jobs eligible for the two- and four-year visa streams will be slashed, with 216 occupations ranging from antique dealer to fisheries officer to shoemaker axed from a list of 651 professions on the list.
The Prime Minister said the focus is to ensure that Australian jobs are "given to Australians first".
The 457 visa enables a foreign worker and their family to live and work in Australia for four years. They can recruit cross-border talent if a job cannot be filled locally.
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About 95,000 foreigners, including many Indians are in Australia under the 457 visa norm, which the government wants to scrap and give their jobs to locals.
"The government is in touch with the governments of the United States and Australia on these matters and is also making full assessment of impact of these recent changes, in consultation with all stakeholders".
Technically speaking, the 457 visa is a temporary one for skilled workers, but it was one of the few that offered a path to citizenship for those who continued to work in the country.
The new visa will include a short term two-year stream with a broad list of occupations reduced from the current list of more than 200.
Some of the changes require English proficiency, an increase in application fees, subjection to labor market testing, and additional barriers to permanent migration after the work visa expires.
"This is tinkering at the edges and it's unlikely there will be any real change", he said. They will probably be welcomed by the conservative base of the Coalition and nationalist parties such as One Nation, but some sections of Australia's migrant communities could feel targeted.
Malcolm Turnbull's announcement comes as US President Donald Trump prepares a executive order that will crack down on "guest worker visas" and enforce a policy to "buy American, hire American".
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