Labour is calling for a review of New Zealand's skills shortage list, saying there is a mismatch between immigration and labour market needs.
The 200,000 people issued temporary work visas in the year ending June is the highest ever annual figure.
Prime Minister John Key said the numbers reflected a high skill shortage, but that has been questioned by the Auckland Chamber of Commerce which said many new residents didn't have the skills to address the gaps in construction, health and information technology.
But Labour leader Andrew Little said Mr Key was refusing to admit there was a problem with migration numbers, and work permits were issued for jobs that thousands of Kiwis were trying to get.
Mr Little told Morning Report thousands of labourers were unemployed while workers were being brought in from overseas to fill jobs.
He said there were 15,000 unemployed labourers, while last year 6500 people were given visas to do labouring work.
A review of immigration should include examining the skills shortage lists and looking at whether foreign students should be allowed to work, he said.
But Immigration Minister Michael Woodhouse said that didn't add up, as 56 occupations had been taken off the skills shortage list in the past three years, and five occupations being added.
He told Morning Report the skills shortage list was not a blind equation.
"We work very hard to make sure kiwis are at the front of the queue for those jobs."
Mr Woodhouse said some markets in New Zealand, such as Queenstown, relied heavily on a fluid international workforce, as it was hard to get New Zealanders to settle there.
Immigration blamed for housing shortage
Meanwhile a leading real estate company is blaming record immigration and poor planning for the housing shortage.
In its latest market report, Harcourts found the average house price in New Zealand had increased by 15 percent since last July, but the available stock had plummeted by almost 24 percent.
Chief Executive Chris Kennedy said until there was greater control in the Auckland market, other regions would see increased demand.
But he said that demand came at a time when stock levels were lower than normal.
"When there's prediction of some 70-odd thousand net positive migration ... there are figures being talked of some 75 percent to 80 percent of those people landing and staying in Auckland, it has to cause a housing issue somewhere along the line."
Mr Kennedy said Auckland's Unitary Plan was a step in the right direction and would help to give people more housing options.