It was billed as an "Australians first" game-changer that would give local workers priority over foreigners for local jobs.
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But Opposition Leader Bill Shorten claims the Turnbull government's decision to slash the list of occupations eligible for the two-year visa is "already unravelling".
Labor has released an analysis that shows just 8.6 per cent of foreign workers currently on a 457 visa are working in jobs that would be excluded under the new visa system.
Less than 1 per cent of Australia's 12 million-strong workforce, or 95,758 people, held a primary 457 visa last year.
The 651 professions eligible for a 457 visa would be slashed to 435 eligible for a new two-year temporary skills shortage visa, under the changes announced on Tuesday. The list for a new four-year visa would be even shorter.
Further, of the 216 jobs being slashed from the eligible occupations list, 18 of those being cut haven't been used once in the past decade. Those jobs include turf growers, deer farmers, homeopaths and detectives.
Another 46 occupations on the list haven't been granted a visa once in the past year, including antique dealers, futures traders, park rangers, blacksmiths, gunsmiths, saw makers and repairers, sail makers, shoe makers, funeral directors and golfers.
But cooks, cafe and restaurant managers, chefs, marketing specialists and programmers - professions for which 457 visas are most commonly used to bring in foreign workers - remain on the list, though they will be subject to the new rules requiring police background checks, two years of work experience and labour market testing.
Mr Shorten said the analysis of the publicly available data, which was current to December 31, 2016, showed the changes to the list of eligible occupations "isn't a crackdown, it's a con job".
"He's [Mr Turnbull] tinkering at the edges for a headline so he can keep his job for another month. He's scrapped one visa and created two new ones - not even one in 10 visa holders would be affected," he said.
"Under Malcolm Turnbull, we'll still be bringing in cooks, builders, bakers and hairdressers from overseas to do jobs that Australians should be doing. He is so out of touch - he is cracking down on dodgy visas for antique dealers, but not for nurses. He says he now supports labour market testing - but he's been opposing it in the Parliament."
But Immigration Minister Peter Dutton hit back on Wednesday afternoon, disputing the Labor analysis and demanding the Opposition Leader explain "why Labor granted more than 21,000 visas in those [abolished] categories during its years in government".
"Mr Shorten and his colleagues are the ones who perverted the 457 programme to the extent that they let fast food outlets bring in foreign workers to fill jobs that young Australians should have had," he said.
"The Coalition's abolition of the 457 visa programme will see Australian workers get priority for Australian jobs. Every visa application in the new Temporary Skill Shortage Visa streams will be subject to mandatory labour market testing with limited exemptions."
In 2015, Mr Turnbull accused Labor and the union movement of "economic chauvinism" for championing and then introducing changes to the 457 visa scheme when in government.
And in 2013, before the Abbott government scrapped the limit on the number of foreign workers an employer could bring in on a 457, Mr Turnbull said former prime minister Julia Gillard's "attack on 457s strikes at the heart of the skilled migration system".
Mr Shorten's move to ramp up his attack on the Turnbull government's visa changes came as the Prime Minister on Wednesday morning indicated broader changes were in the works to Australia's citizenship laws, which would "enable our migration program to contribute still further to our social cohesion while enhancing our security".
"Australia must continue to attract people who will embrace our values and positively contribute, regardless of nationality or religious belief. This is important for temporary visas; vital for permanent residency and citizenship," he said.
These changes would ensure that people who obtained Australian citizenship were "consistent with our cultural values".
Last year, Fairfax Media revealed senior bureaucrats held serious concerns that changes to Australia's visa system could create a "two-tier society", undermine social cohesion and stoke violent extremism.
The reforms would involve the mandatory granting of a new provisional visa before a person would be granted permanent residency.
Discussing the changes to the foreign worker visa program, Mr Turnbull said Mr Dutton was the nation's "chief recruiter" and the new system would allow Australia to get the best and brightest recruits from overseas.
"Under Labor, net migration peaked at an unsustainable 315,000 migrants a year. It's now less than 200,000. We are back in control of our borders."
