Australia yesterday tightened its skilled foreign workers programme, abolishing the 457 visa scheme used by about 170,000 people and their families, including more than 500 Singaporeans, a year.

Signalling that Australia is set to follow other developed nations, such as the United States and New Zealand, and adopt a harder line on immigration, Prime Minister Malcolm Turnbull said the move was "all about Australia's interest".

The 457 programme will be replaced by two temporary skilled visas - one lasting two years and another lasting four years for critical skill shortages only.

The visas will impose tougher English language tests, stricter labour market testing, at least two years of work experience and a police check. Fees will rise from A$1,060 (S$1,120) to A$1,150 for the two-year visa, and a A$2,400 fee will be charged for the four-year visa.

Mr Turnbull said the new programme aimed to ensure that foreign workers were hired only to fill skill gaps and not "simply because an employer finds it easier to recruit a foreign worker than go to the trouble of hiring an Australian".

"We are putting jobs first, we are putting Australians first," he said.

The government said the measures will be introduced immediately and the full implementation will be completed by March next year.

Those currently holding 457 visas - which last four years - will be exempt from the changes.

Government figures show that 522 Singaporeans - including their family members - were granted 457 visas in 2015-16, 650 in 2014-15, 608 in 2013-14 and 679 in 2012-13.

Most lived in New South Wales, Victoria and Western Australia.

The main source nations of 457 visa holders are India, which accounts for about a quarter of all visas, followed by Britain, at 19.5 per cent, and China, at 5.8 per cent.

As of last September, 95,757 workers in Australia were on 457 visas and 76,430 people were on associated secondary, or family, visas.

The government is slashing the number of occupations available under the new scheme, from more than 650 previously. Some of the 216 jobs that have been removed include antique dealer, stonemason, flight attendant, shoe maker, butcher, biochemist and various types of engineer.

The visas have been commonly used in the mining industry, construction, agriculture and the tourism and hospitality sectors. Some of the jobs that are most commonly listed by applicants are cook, developer programmer, medical officer and cafe manager.

Immigration Minister Peter Dutton said the new scheme was designed to cut down on the number of people who ended up transferring from temporary to permanent residency.

Those on two-year visas will not be able to eventually apply for permanent residency, he said. The four-year visa, which is targeted at higher-skill jobs, will still include a path to residency.

"The existing 457 visa programme is conducted for a period of four years, but essentially it is open-ended, and it results, in many cases, in a migration outcome," he said.

Business groups, which have tended to back the visas as a way to fill labour shortages, gave a mixed response.

"The capacity for businesses to hire temporary workers to fill genuine skill shortages has been an overall boon for Australia, allowing the economy to ride out volatile economic cycles," said the Business Council of Australia's chief executive, Ms Jennifer Westacott.