Prime Minister John Key is dismissing a call by Labour to restrict work visas as the economy starts to slow down.
Just over 186,000 people were granted work visas in the last financial year, almost 16,000 more than the year before.
Labour leader Andrew Little said there was no question high levels of immigration had propped up the economy.
"But that has put pressure on certainly the workforce, and we know now - from reports that both the Treasury and MBIE [the Ministry of Business, Innovation and Employment] have produced - are that there are real issues now about immigrations, particularly in semi-skilled occupations."
Finance Minister Bill English said the economy was not too reliant on immigration.
The forecasts in the Budget were based on an assumption that immigration was going to drop off quite quickly, he said.
"So it's currently probably peaked about now at about 69,000 to 70,000 and Treasury assumed it would drop to 12,000 over three years.
"Now, most people would say that looks like a pretty rapid drop so the growth over the next three to four years is not dependent on migration staying high."
But Mr Little said that as the economy slowed and unemployment rose, it was time to restrict the number of work visas.
"It's a matter of common sense that when the economy is slowing and we have issues with rising unemployment, that increasing your workforce intake and people on work permits by 5000 more than the previous year - that doesn't make sense and I think that's where you have to address it.
"I think there is a case to say we need to manage immigration when it comes to our workforce needs in a much more agile, flexible way that meets our economic needs not just sees bigger and bigger numbers irrespective of our economic performance."
Mr Key said there was no need to restrict the number of work visas being issued.
"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 [Christchurch] 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."