Calls for a review of New Zealand's immigration laws are growing as the number of people settling here reaches record highs.

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New Zealand First leader Winston Peters said the country's reaching breaking point, and immigration numbers should be slashed to ease pressure on infrastructure.

He said New Zealand must reduce its net immigration numbers from 70,000 a year to between 7000 and 15,000.

His comments follow a treasury report which warned the rising number of migrants would put additional pressure on the housing market.

"We have a huge lack of housing, if you want to give Auckland a chance to breathe and develop you can't go on with these record levels of immigration," Mr Peters said.

But Economic Development Minister Steven Joyce said he believed the number of immigrants entering the country was about right.

He told Morning Report Mr Peters' proposal would be a shock to the economy.

"It would have the effect of clawing back the growth rate of the New Zealand economy. It's a great thing being a growing economy because it creates lots of jobs, and if you turn around and say 'well, let's switch that tap off', you can do that, but the net effect will be a much slower economy."

Mr Joyce said the government was always reviewing immigration settings, but restrictions had to be introduced gradually.

Massey University population expert Paul Spoonley said cutting net immigration to 15,000 a year was unrealistic.

"Immigration is an easy scapegoat to some of the country's problems, but to simply cut numbers dramatically is unrealistic - 124,000 permanent arrivals is historically very high, whether we need to pull that back and not have so many arrivals is a debate we need to have as a nation."

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Professor Spoonley said the numbers arriving, and the demand locally to fill labour supply, needed to be balanced.

He said current arrivals were running at an incredibly high level.

"Whether we need to pull back numbers is a debate we should have - in my view it is high but we need the skills, so we need to get the balance right."

A government policy introduced in July last year, which encouraged immigrants to settle in the regions, has resulted in a 45 percent increase in skilled workers being approved for residence visas outside Auckland.

Federated Farmers dairy spokesman Andrew Hoggard said immigrants were filling jobs on farms where New Zealander's simply didn't want to work.

Photo: Radio NZ / Jemma Brackebush

"I've heard of farmers who have advertised for workers at the start of this season - they've had 60 or more applicants, of those only three or four are local, the rest are migrants."

Mr Hoggard said the farming sector actively sought New Zealand workers, but about 20 percent of dairy farm workers are immigrants.

"We still need to have an open mind, if there are genuine shortages in industries where people can't attract local workers, we need the option of migrant staff otherwise our export earnings could be put at risk."

Immigration consultant and former immigration minster Aussie Malcolm said new arrivals were high, but New Zealanders returning home made up a large percentage.

"For Winston to suggest cutting immigration down to 15,000 is naive but equally for the government to say the won't review the figures is also naive, why not have a review?"

Finance Minister Bill English last month said the government was not considering moves to restrict the numbers entering New Zealand.

Labour leader Andrew Little said the number of immigrants joining the work force needed to be managed better.

Mr Little told Morning Report when the economy was slowing, and there was rising unemployment, increasing the number of people coming in on work permits did not make sense.

"There is a case to say we need to manage immigration when it comes to our workforce needs in a much more agile and flexible way that actually meets our economic needs, not just sees bigger and bigger numbers coming, irrepsective of our economic performance."

Prime Minister John Key, however, dismissed that.

"On the skills category, we have a 'New Zealand first' policy - we always try and employ New Zealanders first, but these [immigrants] are people that for instance are coming in as part of the rebuild, they're important in terms of our agricultural sector," he said.

"So it's much harder actually to get into New Zealand than people think, it's just that we have a growing economy and a skills demand."

Green Party co-leader James Shaw said more needed to be done to match immigrants to industry and regions because businesses were still struggling to get the workers they need.

A former immigration minister, Aussie Malcolm, said more focus needed to be put on employers, to help manage the number of immigrants entering the work force.

Mr Malcolm said immigrants were putting a lot of pressure on infrastructure, and it would be a good time for the government to review the system.

He said he'd consider a system that put more emphasis on employers demonstrating they had a specific need - for example, a vacancy which could not be filled by Kiwis.