Many international students have been more motivated by working in New Zealand than studying here, Labour leader Andrew Little says.
His party yesterday announced a plan to cut immigration numbers by between 20,000 and 30,000 people a year, by tightening rules around student and work visas.
It would restrict the ability for overseas students studying below bachelor level to work and the number of student visas for courses below that level.
Mr Little told Morning Report the rapid increase in population was putting huge pressure on cities, principally Auckland - but also flowing on to Hamilton and Tauranga.
"You see it with the chronic shortage of housing, traffic congestion, overcrowded schools.
"We've just got to slow it down, we cannot continue to absorb the numbers coming in at the volume and the pace they are at the moment."
A group representing private training colleges said it feared institutions could go under if the policy was implemented.
Mr Little said the policy would target students coming in for low-quality "short-term business certificate type" courses.
He said the rapid increase in enrolments over the past three years indicated those students were more motivated less by the study than by the opportunity to work 20 hours during their course and for a year afterwards.
He said private training establishments were nimble enough to switch their approach and take advantage of other opportunities such as the party's policy of three years of free post-school education and training.
'Significant negative effect'
Immigration Minister Michael Woodhouse told Morning Report education was one of New Zealand's biggest earners, and Mr Little wanted to choke that to satisfy the whims of his supporters.
"There's no doubt that if these policies were implemented that would have a significant negative effect on it
Mr Woodhouse said many overseas students wanted to settle in New Zealand but the overwhelming majority went home after their studies.
Prime Minister Bill English yesterday said cutting immigration when there was a need for workers would have a negative impact on the economy.
"We have to build the houses, we have to build the roads and the water pipes to support the houses - that's for people who are here now," he said.
Mr Little said the economy was already grinding to a halt under the weight of infrastructure problems.