Sweeping changes to the skilled migration program have been broadly welcomed by business although there are some concerns over new language requirements and implementation.
Business Council of Australia chief executive Jennifer Westacott said the changes were a chance for Australia to rebuild confidence in the system.
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Turnbull ends 457 visas
Announcing it will abolish the controversial 457 visa program for temporary skilled migrants, the Turnbull government has adopted a new "Australians First" approach to skilled migration. (Malcolm Turnbull/Facebook)
"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 including in the mining industry," Ms Westacott said.
"Now that the government has taken this decision, it is crucial that they work with employers to get the details right and ensure industry's ability to fill genuine skills shortages is enhanced, not degraded," she said.
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Accounting giant KPMG immigration practice national leader Michael Wall said the number of 457 visas had been falling in the recent years and there was no evidence that the current system was not working properly.
"This move does not align with Australia's stated commitment to increasing innovation and causes uncertainty for foreign companies considering investing or doing business here," he said.
Accounting software supplier MYOB chief executive Tim Reed said 457 visas were important for the accounting software provider.
"Creating opportunity for skilled labour to become part of the workforce is good for everyone; it's good for business and good for the economy," Mr Reed said.
"Hiring skilled software engineers allows us to hire more graduates and more people with entry-level skills. We do need to enable Australia's talent to be accompanied by skills from overseas where it is good for economic growth."
Trade Unions, however, warned the 457 visa program would simply be rebadged.
The Australian Council of Trade Unions said Prime Minister Malcolm Turnbull's announcement was "more spin than substance".
We just need to make sure that that's not a red-tape nightmare.
Restaurant and Catering Australia chief executive John Hart
"On the face of it, it looks like a cynical attempt to rebrand a wildly unpopular policy," ACTU president Ged Kearney said.
"It doesn't matter what you call the visa scheme itself, what matters is that Malcolm Turnbull put an end to the exploitation of workers and of work visas."
Ms Kearney said workers from overseas needed to fill genuine skills gaps.
"It is unlikely Malcolm Turnbull's proposal will do anything to remedy the chronic exploitation of our work visa system," she said.
"Where workers can come to Australia and do entry-level jobs like retail shop assistants or kitchenhands, we still have a broken system."
The president-elect of the employer group the World Federation of Engineering Organisations, Marlene Kanga, said the changes might limit the ability of qualified people to come to Australia to deliver large-scale projects.
"Many innovative companies like Atlassian and Google are concerned that they wont be able to get people with the right skills they are looking for," Ms Kanga said.
But Engineers Australia executive general manager Brent Jackson said the organisation that represents workers in the industry had concerns about the existing system which catered to the boom-bust nature of the local infrastructure market.
"For a long time we've been calling for more rigorous testing of the labour market around 457s, particularly for engineering as essentially there's been a blanket exception for them," he said.
Australian Industry Group chief executive Innes Willox also agreed the 457 visa system, which was supposed to address skills shortages, was up for reform.
"The 457 Visa system was a highly valued program but misunderstandings of its use and exaggerations of its misuse led it to become a lightning rod for anti-migration sentiments," he said.
"Ending that visa category, adding limits and more clearly defining its successor visas will help draw the focus back to the program's primary purpose: addressing the pockets of skill shortages that persist in our economy."
Mr Willox said new integrity measures such as requiring a tax file number were also welcome. "The new approach to the Skilled Occupation List will also assist in identifying genuine skill shortages and guarding against often opportunistic spikes in applications for vague or non-essential skill categories.
He said changes to language testing would need to be monitored to "ensure they do not adversely impact on access to skilled workers in the lower-skilled categories".
"Many of our workplaces are multilingual and a working knowledge of English is sufficient in many cases to meet both operational and safety requirements."
Mr Willox said the program deserved support from all sides of politics.
Hospitality is one of the biggest users of 457 visas and John Hart, chief executive of industry group Restaurant and Catering Australia, said the new scheme struck the right balance between removing a pathway to permanent residency for lower-skilled workers while still allowing the industry access to temporary staff.
"We can still bring in cooks, albeit on the shorter form of visa, but we need to have those cooks so we can have skilled people to train up apprentices," Mr Hart said. "It's a pretty good balance.
"The area that probably presents the biggest glitch is where you've got the two-year visa that can be renewed onshore. We just need to make sure that that's not a red-tape nightmare."
Minerals Council of Australia chief executive Brendan Pearson said use of 457s in the mining industry had "declined significantly" in recent years.
"The MCA will seek further information about the changes but does not anticipate that they will have an adverse impact on the mining sector," Mr Pearson said.
Master Builders Australia CEO Denita Wawn welcomed the changes.
"However, access to foreign workers to fill immediate skills gaps on projects where locals cannot or will not meet demand for skilled labour is important to the productivity of the building and construction industry," Ms Wawn said.
"We look forward to working with the Government to ensure that the Temporary Skill Shortage Visa is responsive and flexible to our industry's needs," she said.
"We welcome the government's announcement of a new temporary skill shortage visa to allow employers to meet genuine skills shortages while retaining appropriate safeguards for Australian jobs," she said.
Elizabeth Proust, chairman of peak body the Australian Institute of Company Directors as well as major companies in Nestle Australia and the Bank of Melbourne, said the overhaul appeared positive but the detail would need to be examined.
"It sounds like it deals with issues employers have been concerned about," she said.
"Australia for almost all of our history has been built on a successful migration program and I would want to see that continue with the right balance of skills and backgrounds being brought into the country to supplement the skills we do have.
"There's been concern in the past that there were too many chefs and hairdressers but that's been closed down, so it's about making sure we're matching the gaps with skills from people offshore."
Hugh Stephens, director of Dialogue Consulting and the founder of Instagram scheduling tool Schedugram, said it was still not clear what the new visa class would mean for companies hiring technical staff.
"This uncertainty is going to make doing business in Australia more complex, and increase the costs of doing business for start-ups that have better ways to spend their capital," he said.
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