Incomes in New Zealand are dropping on a per-person basis, Finance Minister Bill English has admitted.

Photo: RNZ / Alexander Robertson

Although figures out yesterday showed strong economic growth - at 2.5 percent overall - much of that had been driven by strong immigration flows, with a net gain of about 65,000 people in the past year.

The real national disposable income per capita fell 0.4 percent for the year.

But Mr English told Morning Report in the long-run the numbers would shift.

"You've got a big drop in national income, because dairy prices are down.

"At the same time you've had surprisingly high migration numbers. So it's not surprising that when you work the figures you get a drop in national disposable income.

"Now when you look out ahead you ask yourself 'is it likely that dairy prices will drop further?' Probably not."

Mr English said he did not think too many people were moving to New Zealand, but he expected migration would slow in the future.

He said rates of immigration had stayed high for longer than expected.

He said low inflation and a surprisingly resilient labour market after the Christchurch earthquake were also factors.

"The labour market turned out to be quite a bit more flexible than we were expecting."

He said he thought New Zealand's economic growth was in a "reasonable position to keep growing at 2 to 3 percent".

Green finance spokeswoman Julie Anne Genter said the problem was more to do with the tradable sector growing at a much slower rate than the non-tradable sector.

"So the story that this has been telling is that New Zealand's not getting more productive,' she said.

"So we need a change in policy from the government that's going to drive more innovation, going to drive investment in the productive sectors of the economy rather than property - and so far National in seven years has completely failed to do this."

Photo: GREEN PARTY

She said she didn't think immigration was really the problem, and that Green Party policy was to make sure the right skills shortages were being met by it.

"The problem isn't an increase in people coming to New Zealand, it's that fewer people are leaving New Zealand, that's what's impacted on net migration."

"The big picture is that National is simply failing to drive innovation and create a productive economy because they're very wedded to the status quo, and to protecting big businesses - the polluters - and they have an ideological opposition to the policies that will actually deliver a more productive and competitive economy."

She said the Greens did not have a specific policy on population numbers.