The number of skilled migrants allowed into Australia is being slashed in a bid to protect Australian jobs.

In a sign of the times, the permanent skilled migration program is being slashed by 18,000 over the next three months, with no foreign bricklayers, plumbers, carpenters or electricians allowed in for the foreseeable future.

And the migrant worker program is likely to be cut back further in the May Budget.

In a bid to stem local job losses, Immigration Minister Chris Evans says there will be a massive slowing in the permanent migration program.

"We're going to cut it from 133,500 to 115,000, so that's about a 14 per cent cut," he said.

The Government is under pressure to act against further job losses after figures released last week showed the unemployment rate had risen to a four-year high of 5.2 per cent.

Senator Evans took hairdressers and cooks off Australia's critical skills shortage list last Christmas.

Now he is removing a swag of other occupations, which essentially amounts to all the building and manufacturing trades.

"That's where we've seen a drop off in demand, some major redundancies," he said.

"We don't want people coming in who are going to compete with Australians for limited jobs."

Senator Evans says he sees little chance of a change to policy next year.

"What we'll look to do is run a smaller program and keep the capacity to make sure we can bring in any labour we might need as the year develops," he said.

But the Minister says he does not think there will be any need to take other occupations off the critical skills list.

"What's left on the list is pretty well confined to quite specialist areas that have been in short supply for many years, in the health, engineering and IT areas," he said.

"I doubt there are going to be many changes in that regard. We're down to a very short list now.

Employers can still apply to bring in foreign trades people by sponsoring them or using the special 457 visa category for temporary migrant workers but they must prove they cannot source labour locally.

That is becoming increasingly difficult to justify as the economy contracts.

Opposition Leader Malcolm Turnbull says the Government should act to cut further if unemployment worsens.

"We've been calling for the Government to cut its immigration intake for months now in light of the worsening economic situation so this is a welcome move," he said.

"It's good that they've finally recognised the gravity to the threats to jobs in Australia and acted to reduce the immigration intake."

The ACTU says it is prudent to make the cuts when unemployment is on the rise.

But the Australian Chamber of Commerce and Industry's Peter Anderson says even in tough times there will still be trades skills shortages.

"We would have preferred a status quo position," he said.

"The risk is that you don't want migration policy to move in high peaks and low troughs because that does create dislocation through the economy.

"Often in this area it is far better to allow the labour market to operate in a more natural way."

The Master Builders Association says the cut to the migration program is warranted.

Chief executive Wil Harnisch says unemployment in building and construction is heading up at an alarming rate.

"We're projecting at least a loss of 50,000 jobs in this industry over the next 12 months and it's likely more to come," he said.

"The Government's building-the-nation and jobs plans and the first homeowner grants schemes certainly will underpin conditions in the building industry but we are still seeing a significant slowdown in building activity. That simply cannot be made up by the Government's stimuli packages."

Adapted from an AM story by Alexandra Kirk