Prime Minister Malcolm Turnbull said the federal government was "putting Australian values at the heart of citizenship processes and requirements".
And there is no wait for the changes to kick in.
Turnbull he said would "put jobs first" and "Australians first", signalling a reduction in the occupations available to skilled foreign workers and raising the threshold to qualify.
The government on Tuesday scrapped a visa programme for temporary foreign workers and replaced it with a new system aimed at reducing unemployment among Australians.
The abolition of the 457 visa - to be replaced by two new tighter temporary skills shortage visas - is, according to Turnbull, all about "Australia first".
In a blow to Indian IT industry and professionals, US President Donald Trump has signed an executive order for tightening the rules of the H-1B visa programme to stop its "abuse" and ensure that the visas are given to the "most- skilled or highest paid" petitioners.
But it would be a pity if in doing so, other core Australian values were trashed: those going to tolerance, multiculturalism, and freedom from persecution. The four-year high-level skill visa requires three years of stay to qualify holders for permanent residency. Cheaters will now automatically fail.
The new test will not only have multiple-choice questions regarding Australian laws, symbols and history, but now it will also ask applicants whether or not they are employed, if they send their kids to school and how they feel about certain social norms.
Australia will make it more hard to gain citizenship in a major overhaul of its migration process, the BBC reported.
"Criminal activity including family violence or involvement in organised crime is thoroughly inconsistent with Australian values", Mr Turnbull said.
While we don't have any real detail yet regarding this "change", we suspect it will boil down to a rebranding of the 457 visa, with some additional restrictions or requirements to close the loopholes of which employers have always been taking advantage.
The most recent Immigration Department statistics show 136,572 people drawn from 210 countries became citizens drawn in the 12 months ending June 2015. "We want people who abide by our laws and our values and we should expect nothing less", Mr Dutton said.
Prospective Australian citizens will need to pass a standalone English test, demonstrate a commitment to Australia and have been a permanent resident for four years, under changes announced Thursday.
Like the changes to the foreign worker visa system, the Government states that it has been working on the citizenship changes for sometime.
But Shorten said Turnbull had been forced by the most conservative elements of his government to propose the changes.