Some of Australia's top restaurateurs are warning their businesses are being put at risk due to an extreme skills shortage in hospitality that is being exacerbated by the Federal Government's drastic changes to the 457 visa program.

The changes, announced in April, will abolish the pathway to permanent residency for key roles including restaurant managers, bakers and cooks.

The hospitality industry relies on foreign workers to fill certain roles, from a French pastry chef to a specialist in sake.

But business owners have told Lateline the changes mean a level of uncertainty that will jeopardise their plans for expansion — and ultimately impinge on the quality and diversity of the Australian dining scene.

Celebrity chef Neil Perry has about 3,000 staff across dozens of restaurants, including Rockpool, Jade Temple and Rosetta in Sydney, about a third of whom are on some kind of temporary work or student visa.

"[Workers on 457 visas] are super important for the restaurant industry because there are skills we need to bring in, both back- and front-of-house, in cooking, service [and] sommeliers," he said.

He said he had always sought to employ Australian staff in those positions, but it was not always possible to find the right skillset.

"It means we have to reflect on [any possible] expansion — can we or can't we. [With the] labour market saying [it] can't supply any more, we have to rethink what we're planning to do."

Hospitality already facing skills shortage

Prime Minister Malcolm Turnbull, in announcing the abolition of the 457 visa category, said the change was designed to ensure Australian jobs were filled by Australian workers where possible, and that foreign workers were not being brought in "simply because an employer finds it easier to recruit a foreign worker than bother hiring an Australian".

Will Aldous, a migration agent at TSS Immigration, called that scenario "ridiculous".

"Our clients go through an extensive application process, and face delays of accessing staff of many months while visas are processed," he said.

"Employers and visa applicants are vetted by the Government. It's not a quick fix for businesses; it takes a long time. The business that will typically use this program will do so as a last resort — they pay $4,000 to $5,000 to bring someone in on a 457 visa."

Critics say the changes, which not only remove the pathway to permanent residency but increase the cost of hiring a skilled migrant and place a higher English language requirement on applicants, will create uncertainty for those currently here.

"These are people who have uprooted their lives, taken children out of schools in home countries [and] put them into an environment where English is a second language," Mr Aldous said.

"[They] now face the prospect of that dream being shattered because of this change in regulation. They will have to depart — some [won't] even work out the term of their of 457 visa."

Migration consultant Angela Chan said that would be problematic for an industry already facing a skills shortage.

"It was faced with a critical shortage before the abolition of the 457 program," she said.

"It's projected that there will be a skills shortage of 120,000 by 2020 of workers within hospitality and tourism industry."

A Federal Government spokesperson said foreign restaurant managers, bakers, pastry cooks, and chefs remained eligible for sponsorship under the new arrangements, "however they are not intended to substitute for Australian workers".

"The 457 visa is a temporary visa and has never provided a guaranteed permanent resident outcome," the spokesperson said.

"Current subclass 457 visa holders can continue to hold their visa until its expiry and will not be affected by the changes to the lists of eligible occupations unless they apply for a further subclass 457 visa or change employers."

Lack of strong dining scene will hurt tourism, Perry warns

Nino Zoccali, who runs Italian restaurant Pendolino in central Sydney, said the mood in the industry since the announcement had been dire.

"Everybody is freaked out," he said.

"Everybody is talking about key staff leaving and not wanting to stay because of the changes to the rules."

He said 70 per cent of his front-of-house managers were on a 457 visa.

"It's much easier for us and much less costly to employ Australian residents or Australian citizens but they're simply not there," he said.

"That's a big problem for us — when you have key managers in senior roles that you can't fill over a two- or three-year period it becomes quite desperate."

He said the best foreign workers would not come without the possibility of making a life long-term in Australia, and that meant the talent pool in the local hospitality industry would shrink.

The end result, said Mr Zoccali and Perry, would be a downturn in the quality of the Australian food scene.

"I'd love some permanent residency pathways for front-of-house people," Perry said.

"Service is a skill. If you don't think that, it's crazy to go out and promote [Australian] restaurants and tourism around the world and waste our money.

"Because if we don't deliver on the service promise when people come to Australia, they're not going to come back — it's as simple as that."

Watch the story on Lateline tonight at 9:30 on ABC News or 10:30 on ABC TV.