More people have been approved to work in New Zealand in the last year than in any other on record.

Photo: 123RF

More than 200,000 people were issued temporary work visas in the year ending June, almost 30,000 more than the year before.

The number of new residents rose 20 percent over the same period to 52,000.

A demographer, Paul Spoonley, said the numbers were staggering and it was not clear whether there was any sign of a slowdown in the number of arrivals, or of the government putting the brakes on.

Professor Spoonley, the pro-vice chancellor of the college of humanities and social sciences at Massey University, said New Zealand now had the highest inflow of workers and new residents of any OECD country.

Photo: RNZ / Mihingarangi Forbes

"The thing that surprises me is that month on month, and year on year, the numbers of visas given to both residents and temporary workers is continuing to increase, as it is with students.

"So there is an important question about when we begin to tail off, either in terms of the numbers of people applying or the government says enough is enough."

The unemployment rate stood at 5.2 percent for the three months ended in March.

Prime Minister John Key said the record number of applications was not displacing local workers from the job market.

"The people that are allowed in are there specifically because their skills are in demand and we don't have enough New Zealanders to fill those jobs. I suspect those numbers are going to come off a little bit, but overall, they do reflect the demand."

Employers struggling to find skilled workers - Auckland Chamber

Mr Spoonley said employers were struggling to find the skilled workers they needed.

But he said the answer could be in training more people in New Zealand, as well as recruiting them from abroad.

"There is an important policy question, and political question, and that is whether or not we have reached the level of what is called the 'absorptive capacity' of our labour market, and whether we are beginning to displace locals."

Auckland Chamber of Commerce chief executive Michael Barnett said there was a disconnect between the city's high immigration rate and the skills shortages reported by employers.

He said about 800 new residents settled in Auckland each week, but many did not have qualifications to address gaps in construction, health and Information and Communications Technology (ICT).

"The two key government agencies responsible for employment - Immigration and Ministry of Business, Innovation and Employment - need to link arms with Auckland's business organisations.

"The current fine tuning approach to meet demand by offshore recruitment isn't working. A more strategic and fast-footed response to cover skill shortages is required.

"What is clear is that we are not targeting skills where there are immediate and long-term shortages, especially construction - skills that could help Auckland gear up to build more houses."

Immigration New Zealand assistant general manager Michael Carley said New Zealand citizens and residents were always given first priority for jobs, before the jobs were offered to people from overseas who were on labour-market tested work visas.

He said overseas workers were needed to fill jobs when no New Zealanders were available, and where there were particular skill shortages.

The government is now deciding how big the residence programme will be for the next two years, after being set at 90,000 - 100,000 residence approvals for the last two years.

Other visa categories also saw steep rises in the last year. Student visas passed the 100,000 barrier and visitor visas soared by nearly a quarter to almost 600,000 people.