Australia's business leaders have rejected a plan by the coalition government to slash immigration intake, accusing Liberal head Tony Abbott of risking the nation's future economic viability for his short-term populist strategy.

Should the coalition win the August 21 poll, Mr Abbott will reduce the annual immigration levels to 170,000, compared with its peak of 300,000 two years ago. This measure has been widely criticised by business and industry groups, for not doing anything to address the increasing shortage of skilled workers that can potentially cripple productivity.

Representing the chief executives of the country's largest corporations, the Business Council of Australia has expressed disappointment in Abbott's policy, describing immigration as a key driver of the population growth required to ensure the continuation of a solid economy.

"There is a temptation around election time to offer simple solutions, and pitch to perceived self-interest rather than long-term national interest," BCA chief executive Katie Lahey said.

"Migration trend figures suggest the Coalition's approach would have little net effect on the program, but it is nonetheless disappointing to see our global leaders engage in populist rhetoric."

The Victorian Employers Chamber of Commerce and Industry had similar sentiments.

"The first question that comes to mind is why? Migration and immigration should not become a political football. Business is already experiencing a skills shortage and we expect that to deepen . . . in the coming years," said VECCI chief economist Steven Wojtkiw.

"Any decisions relating to immigration should be made on the basis of cost-benefit analysis and thorough consultation and in regards to short and long-term considerations."

According to Mr Wojtkiw, employers would rightfully be wondering where their future skilled workforce would be coming from. "While education migration is not a panacea to the skills shortage -- we need to continue our home-grown efforts to increase skills levels -- migration has a role to play," he said.