Ms Gillard's immigration minister, Brendan O'Connor, last month said he would be introducing legislation which makes obtaining a 457 visa - which allows foreign workers to live and work in Australia on a temporary basis - harder, saying the program was riddled with issues.

The 457 visa program is intended to allow Australia to use foreign labour to fill gaps in its labour market but the program's critics claim unscrupulous employers were exaggerating their need for foreign workers simply to undercut the local labour market - a process known as 'rorting'.

Ms Gillard stood by her minister's decision yesterday but was quickly criticised by Mr Abbott, who said the government's decision would demonise overseas workers and divide Australians.

"First of all we had the false class war, then we had the false gender war, now we have got the false birthplace law," said Mr Abbott.

"One of the things that I thought was very jarring in the prime minister's approach...was this assault on foreigners.

"The fact is, people from overseas have made a magnificent contribution to our country. And trying to stir people up against them is the last thing that the prime minister should be doing.

The Coalition leader said a government under his party would make 457 visas a mainstay of their immigration policy.

However, Ms Gillard hit back by comparing Mr Abbott's comments to his stance during the previous general election.

"I think this is an amazing intervention from Mr Abbott," said the PM.

"Let's remember this is the man who has profited from fear, who's been out there warning people of a 'peaceful invasion', who even as recently as the last few days has had his immigration spokesperson out there trying to stoke fear in the community."

The prime minister said the 457 visa program would remain open to genuine applicants and the changes to be put in place would only reinforce the existing system.

"The Government's plan is a very different approach. We believe that when we are having people come to our country to work on a temporary basis, that we need to ensure that they are meeting skills shortages, that if there are Australians who can do that work, then they should get that work."

A spokesperson for the Migration Institute said politicians were getting roped into a slanging match rather than focussing on the actual visa system itself.

"I just think we need a steady mind and calm conversation going on around it, and not pitting Australian workers against some of these overseas people," said the Migration Institute's chief executive, Maurene Horder.

"That's the thing I'm a little bit alarmed about - that we don't develop a political bunfight for the purposes of an election."

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The Australian Visa Bureau is an independent migration consultancy specialising in helping people lodge applications with the Australian Embassy.