Australia's immigration intake could be slashed by up to 15 per cent under the Federal Governments 457 crackdown.

Estimations from Treasury, Finance and the Department of Immigration into the changes show the annual immigration numbers could slump as low as 160,000.

Prime Minster Malcolm Turnbull this week announced the scrapping of the 457 visa program and narrowing of the employer-sponsored skilled migration program.

The 457 program, introduced by John Howard's government in 1996, allowed overseas workers to stay in Australia for up to four years.

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Prime Minister Malcolm Turnbull this week announced the axing of the 457 visa program

At a speech to the Australian Chamber of Commerce and Industry Breakfast on Wednesday, Mr Turnbull announced plans to change the criteria for skilled migrants to be sponsored by companies.

The maximum age will be reduced from 50 to 45, and competent English will be mandatory, Mr Turnbull said. The permanent residency duration will be extended from two years to three.

'It means we are able to do what Labor could not do — set the parameters for a well-regulated, sustainable migration program and focus our humanitarian efforts on those whom we judge most in need.'

The PM said Australia was bound by national values that transcended race, religion or culture.

'We're not defined by race or religion or culture, as many other nations are. We're defined by commitment to common values — the rule of law, democracy, freedom, mutual respect, equality for men and women.

Migration levels have fallen to around 190,000 under the Turnbull Government down from Labor's high of 315,000 under former Prime Minister Kevin Rudd.

The Federal Government announced plans to change the criteria for skilled migrants to be sponsored by companies (stock)

'We have a unique Australian understanding of a fair go … we should be proud of our Australian values.'

When Mr Turnbull announced the new visa scheme, he vowed it will attract the 'best and brightest' to Australia and target regional skills shortages.

Mr Turnbull's plan involves a short-term two year visa, with the number of available occupations cut from the current list of 200.