Minister for Immigration Michael Woodhouse has tightened the tap on immigration.

The Government is tightening the number of residency permits it grants, in a bid to stem rising demand among foreigners to live and work in New Zealand.

The number of points a migrant has to attain to gain residency has also been lifted, raising the skills threshold under which a migrant has to qualify.

But opposition MPs are criticising the changes as "window dressing", accusing the Government of making a populist move without addressing the issue.

RNZ There will be fewer residence approvals over the next two years: 85,000-95,000.

Immigration Minister Michael Woodhouse made the surprise announcement on Tuesday, with a headline figure that would see 5000 fewer residency permits planned for.

But the changes would have no material affect on the overall numbers of immigrants able to work in New Zealand – no changes had been made to any of the temporary working visa categories.

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RADIO NEW ZEALAND Winston Peters says the Government has been panicked into changes to immigration policy.

A spokeswoman from Woodhouse's office clarified that the changes were a bid to pre-empt rising demand for residency, which was forecast to blowout beyond the normal planning range within a few years.

The changes announced would apply for the next two years and see the Government work to a "planning range" for residence approvals of 85,000 to 95,000 - down from 90,000 to 100,000.

The number of places for migrants to enter on the basis of family members already being here had also been lowered from 5500 down to 2000 per year.

Prime Minister Key said the changes were "at the margins".



"We don't normally bang into the self-imposed cap, which was 90-100,000 people. Because we have done that very recently and we are going through the digestion of that we thought it probably made sense to reduce it a small amount."

He said it was not a dramatic move, but it would have some impact.

The family reunification cut was made while the Government assessed the impact of the category on welfare costs and whether people were meeting their commitments.

"It is likely to to be more temporary than permanent."

Parents would be the most affected by the change.

He said people often gave commitments about meeting their financial obligations to their parents.

"We are just trying to make sure they are actually doing that."

"PANICKING OVER POLLS"

Labour leader Andrew Little said the Government's announcement was a "U-turn under pressure".

"It doesn't look like it addresses the real issue, which is those on temporary visas coming into semi-skilled rolls which the Reserve Bank and Treasury says is driving down wages.

"Nor does it deal with the student fraud and student visa fraud and exploitation of students that we've seen in the headlines recently."

Little said the real issue to address was people being recruited into senior skilled rolls, rather than penalising those who had already been here and earned the right to apply for residency.

"I think they've got it round the wrong way frankly."



NZ First leader Winston Peters accused the Government of moving to a populist position, without doing much.

"They're panicking from reading their polls, the public has serious concerns and they're tinkering around the edges.

"The message for the people of this country is you can't trust National on this most important issue."

Peters said the Government should have gone further.

"If you look at the numbers, still gross about 1900 are going to come in every week now - 1900 a week."

National had created a "massive problem" by bringing in large numbers of unskilled migrants, Peters said.

The Parent Category meant their parents had "flooded in" as well.

"Over 15 years we have taken in over 87,000 parent migrants who have no requirements to contribute to the economy while they receive free access to public health immediately, and superannuation after just 10 years here."

The New Zealand Residence Programme sets a planning range for the total number of people approved residence over a multi-year period, across three streams: Skilled/Business, Family, and International/Humanitarian.

"NOT A HARD CAP"

The Minister's office said the programme was "not a hard cap".

The Skilled Migrant Category, within the Skilled/Business stream, made up around half of the entire residence programme.

"Migrants make a valuable contribution to New Zealand both culturally and economically, and the Government periodically reviews all our immigration settings to make sure they are working as intended," Woodhouse said.

"While we are confident our immigration settings are working well, the residency programme is reviewed every couple of years to ensure we have the right number and skill mix of people gaining residence.

"As part of that review, today I am announcing a small change to the total number of people gaining residence."

Demand for entry under the Skilled Migrant and Family Categories was increasing, raising the number of points required for residence from 140 to 160, Woodhouse said.

"Increasing the points required to gain residence from 140 to 160 will moderate the growth in applications in the Skilled Migrant Category and enable us to lower the overall number of migrants gaining residence.

"Changes to the Family Category, including temporarily closing the Parent Category to new applications, will also reduce the total number of migrants being granted residence.

"Raising the points will also prioritise access for higher-skilled migrants, ensuring we strike the right balance between attracting skilled workers that allow companies to grow and managing demand in a period of strong growth."

IMPACT ON INDUSTRY

There are fears immigration curbs could impact on the hospitality industry and rural New Zealand.

Financial markets reacted swiftly to tighter immigration controls set out by Immigration Minister Michael Woodhouse, with the dollar sliding a quarter of a US cent within an hour. The Kiwi briefly sank below 71 US cents for the first time since July in mid-afternoon trading.

Business NZ chief executive Kirk Hope said the changes were positive and showed the Government had taken on board employers' concerns regarding the skill base of people applying for permanent residency.

Kim Campbell, chief executive of the Employers and Manufacturers Association, said the immigration changes "probably made some sense".

But Hospitality Association spokeswoman Rachael Shadbolt said it would be "very concerned" if the new skilled-migrant threshold made it harder to attract chefs to New Zealand. Only time would tell if that would be the case, she said.

Xero's global "people manager" Andy Burner did not believe the higher number of points required by skilled migrants would stop Xero from attracting software developers to New Zealand.

Xero was mainly recruiting "highly-qualified individuals" who should sail clear of 160 or 165 point level, he said. But he believed other employers might not be so lucky.

​Federated Farmers employment spokesman Andrew Hoggard voiced caution about the changes, noting unemployment was very low in parts of Canterbury and Southland.

The rural lobby group wanted to see more "pathways for residency" for people who had been in the country on temporary visas and who had become productive members of rural communities, he said.

"The raising of the points is probably not going to lend itself to improving that," Hoggard said.