The Government will replace skilled 457 visas with a new category to give Australians priority for Australian jobs, Malcolm Turnbull said in a shock announcement on Tuesday.

Turnbull used Facebook to announce the policy, which he said would “put jobs first” and “Australians first”, signalling a reduction in the occupations available to skilled foreign workers and raising the threshold to qualify.

“Australians must have priority for Australian jobs – so we’re abolishing the [class] 457 visas, the visas that bring temporary foreign workers into our country,” he said.

“We’ll no longer let 457 visas be passports to jobs that could and should go to Australians.

“It’s important that businesses still get access to the skills they need to grow and invest.

“So the 457 visa will be replaced by a new temporary visa specifically designed to recruit the best and the brightest in the national interest.”

Turnbull said the new visa would “better target genuine skills shortages” and would include new requirements such as previous work experience, better English-language proficiency and labour market testing.

He said the government would establish “a new training fund” for Australians to fill skills gaps.

“Our reforms will have a simple focus: Australian jobs and Australian values.”

Currently 95,758 people are in Australia on a 457 visa. The highest proportion of foreign workers came from India (24.6%), the United Kingdom (19.5%) and China (5.8%).

At a press conference in Canberra, Turnbull said the 457 visa system needed to be replaced because it had “lost its credibility”.

It would be replaced with a new temporary work visa, available for two or four years, requiring visa-holders to have two years’ work experience, a criminal record check, and “in the majority of cases” mandatory labour market testing.

For the two-year stream, Turnbull said a broad list of occupations would be eligible but there would be a “substantial reduction”, removing more than 200 jobs from the list.

The immigration minister, Peter Dutton, said the list of eligible jobs would be “even tighter” for the four-year visa. Those workers will also require “a higher standard of English”, Turnbull said.

The arrangements will be grandfathered, meaning current 457 visa-holders will be unaffected.

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