The success of Australia's skilled migration programs is reliant on business doing the right thing, which is why the government is moving to close loopholes in the system, Multicultural Affairs Minister Kate Lundy says.

Under the existing system, the government was unable to move against companies, such as one in Parramatta that has brought in temporary workers described as program and project administrators and put them to work as security guards, Senator Lundy said.

"These are examples of why we need to tighten guidelines," she said in Melbourne.

"Until we do, the Department of Immigration and Citizenship can't take actions against these employers even when it suspects the jobs described have been created solely to bring a person into the country for a completely unrelated purpose."

The federal government has announced a clampdown on the 457 visa program, saying the government will address abuses and ensure Australian workers get first preference for jobs.

In a speech in Melbourne, Senator Lundy lauded the success of skilled migration programs but said companies needed to play by the rules for them to be successful.

"Skilled migration programs and in particular the 457 skilled temporary foreign worker visa class were created for a specific purpose," Senator Lundy said.

"All of these programs are reliant on business doing the right thing, not by exploiting workers by using these programs in the way for which they were not designed."

Senator Lundy emphasised that this applied to all skilled migration programs, not just the 457 temporary work visas.

"These changes aren't going to starve industry in any way," she said.