LEIGH SALES, PRESENTER: The Federal Government's bid to crack down on the use of 457 visas has sparked a torrid debate in parliament, with the Opposition accusing the Prime Minister of using the issue to divide Australians.

Prime Minister Gillard says the crackdown is all about saving Aussie jobs, but Tony Abbott has branded that slogan as "forced patriotism from a failing government" and accused the Prime Minister of "clinging to office with ever more desperate stratagems".

Since launching its offensive against the 457 program, The Government has struggled to find evidence to back its claims that the system is being abused.

7.30 has been investigating the use of 457 visas in the IT sector. As Hayden cooper reports, the sector has been bringing in hundreds of workers from overseas instead of hiring locally.

HAYDEN COOPER, REPORTER: The booming Indian IT industry is conquering the world. Its companies are multiplying, their staff spreading far and wide. And their presence in Australia through the use of 457 visas has become the centre on a concerted political attack.

JULIA GILLARD, PRIME MINISTER: To stop foreign workers being put at the front of the queue with Australian workers at the back.

HAYDEN COOPER: In some quarters, The Government's campaign has been condemned as racist, but within the IT industry there are concerns about the use of 457 visas for jobs which could easily be filled by Australians.

HASAN MAHBOOB, IT WORKER: Project managers, program managers, account managers, relationship managers, I do not see those roles should be imported under 457 visa conditions.

HAYDEN COOPER: Hasan Mahboob is one Australian IT manager who thinks his industry uses too many 457 visas. Many workers come from India.

HASAN MAHBOOB: There is a large number of 457 visa applicants, or use of 457 use more widely which I don't personally believe one in - under 457 visa conditions.

HAYDEN COOPER: In the Indian business world there are few bigger names than TATA. The company makes everything from cars to tea. And its IT arm, TATA Consultancy Services, or TCS, is the giant on the Indian IT scene. TCS employs almost 300,000 worldwide, rakes in billions of dollars a year, and is the outsourcing company of choice for some of Australia's biggest firms. Qantas, Woolworths, and other clients sing their praises.

GRANT STENT, TELSTRA CUSTOMER ENABLEMENT DIRECTOR: I work for Telstra, Australia's largest telecommunication company. The relationship with TCS and Telstra, if I was gonna sum it up in a word I'd say exciting.

LAURIE BARON, AGL HEAD OF VMO: AGL is one of Australia's largest energy retailing companies. I've said this to many people, I still haven't met a TCS person I didn't like.

HAYDEN COOPER: But current and former TCS staff have told 7.30 that the Indian based IT power house is addicted to 457s.

HAYDEN COOPER: Is this a company that over uses 457 visas?

FORMER TCS WORKER: I believe it did. I was never asked to advertise for any Australians when developers were required. We just contacted the local area manager and he would send a developer on the next plane from Mumbai.

HAYDEN COOPER: At Qantas, TCS is known as a tier one partner. It's held a $120 million IT contract with the airline for the past seven years. But its Australian based staff working on the account are almost all brought from overseas. This is the list of TCS workers at Qantas. Of the 211 names almost 200 are on 457 visas, filling roles like business analysts, project managers, even accountants. This woman doesn't want to be identified because she's looking for work in the IT sector, but the former business analyst was employed by TCS, and says she witnessed an open reliance on 457 visas at the expense of local graduates.

HAYDEN COOPER: You're looking for work yourself, do you believe that the use of foreign workers has put you out of a job?

FORMER TCS WORKER: Yes.

HAYDEN COOPER: Hasan Mahboob also used to work for TCS on the Qantas account. He says the visa use mirrors a broader problem in the industry.

HASAN MAHBOOB: I certainly see heavy use of 457 visa starting from the very top, the management level of people. All of which I question should be done by 457 visa.

HAYDEN COOPER: The immigration minister says the example raised by 7.30 vindicates his claim of rorting in the IT sector.

BRENDAN O'CONNOR, IMMIGRATION MINISTER: Well I just say that they should desist from acting contrary to the intention of the scheme.

HAYDEN COOPER: Brendan O'Connor singles out some key statistics to argue his point of 457 abuse. The first is the blow out in numbers. Last financial year according to department figures, almost 11,000 457 visas were issued in the IT sector. That's an increase of 68 per cent since 2008. Yet over the same period, the growth in all 457 visa users across all industries was just 35 per cent. Then there's the issue of wages. In most industries they've been increasing for workers employed on 457 visas, but in IT they've fallen since 2008. A sign to the minister that foreign workers are being exploited to drive down company costs.

BRENDAN O'CONNOR: I don't think I can be any clearer as minister that we don't want the scheme to be used in a way that's going to undermine employment conditions or seek to unfairly displace local workers.

HAYDEN COOPER: The Government has struggled to get its legislation toughening up the 457 rules through Parliament. It wants stronger labour market testing requirements, so before companies look abroad for workers they must prove they've advertised locally. It's an approach taken in Canada. There too TCS has been in the spotlight, accused of getting around those rules.

CANADIAN REPORTER: A former TCS manager told us the company went through the motions of posting jobs but mostly ignored skilled locals who applied.

HAYDEN COOPER: And in the US a similar story. This video shows lawyers coaching companies on how to advertise locally but find no-one.

US MC: Our goal is clearly not to find a qualified and interested US worker and, you know, that in a sense that sounds funny but it's what we're trying to do here.

HAYDEN COOPER: Unions here fear the same will follow.

PETER TIGHE, ELECTRICAL AND PLUMBING UNION: If the market rate for someone is 70 to 80,000 dollars a year, then if you advertise at $20,000 below that market rate you're not going to get any applications. So it's very important that labour market testing really reflects the market.

HAYDEN COOPER: The IT industry as a whole rejects allegations of 457 abuse but unemployed Australian IT workers tell a different story.

FORMER TCS WORKER: It's just too easy. It's unbelievably easy.

HAYDEN COOPER: Hassan Mahboob now works for another IT company. As a manager, he says he always tries to hire locally but just wishes that others would do the same.

HASAN MAHBOOB: Authorities here need to put a bit more - they need to say whether Australian local recruits, my kids, my grandkids are also looked after. I just want to make sure we look after our next generation as well.

LEIGH SALES: Hayden Cooper with that report and 7.30 contacted TCS to ask how many of its workers are on 457 visas. It replied, "No comment."