Channelling benefits of increase to regions which need it most is the next big challenge.

Many New Zealanders can tell the Government exactly how to fix the problems of housing affordability and much else: stop immigration. The Government clearly has no intention of doing so.

In the Budget publications this week there are facts, figures and graphic illustrations of the level of net immigration the country is receiving. Six months ago it was forecast to peak at 62,700 for the year ending next month. Now the forecast peak is 70,700. The country has been enjoying annual immigration gains most years since the turn of the century but the previous peak, in 2003, was 40,000.

The latest rise started after a slight net loss of people in 2012 and it has been steeply climbing ever since.

The Treasury reports that about two thirds of the population gain is immigration, a third is lower emigration. It is now forecasting a slower fall in the annual figures than it did six months ago and does not expect annual net migration to return to its previously "normal" level of about 12,000 until 2019. Consequently, it sees little prospect of house prices relenting within the next three years.

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The forecast fall is only a forecast, there is no sign of it happening and no hint from the Government that it wants it to happen.

The population increase is helping to generate the growth in the economy that puts New Zealand ahead of most other and larger economies at present, which in turn makes it a magnet for yet more migrants, as well as persuading more young New Zealanders to stay here.

The Government would not want to say this out loud, but clearly it is not controlling immigration as tightly as previous governments have done. This attitude undoubtedly comes from the Prime Minister and it is consistent with his disinclination to restrict foreign investment or even monitor its impact on the house market. He deeply believes the country is better off being open and connected to the world's flows of capital, trade and people. The performance of the economy on his watch suggests he is right. Even the housing affordability is a cost of prosperity. If we want drastic steps taken to stop rising prices we need to be careful what we wish for.

[The Prime Minister] deeply believes the country is better off being open and connected to the world's flows of capital, trade and people.

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The Budget documents always include a Treasury paper on the risks that its working forecasts might be wrong, on both the optimistic and pessimistic sides. It sees little prospect that migration will drop more sharply than it predicts, even if, say, Australia was soon to become a drawcard for employment again because much of New Zealand's immigration is students coming to study and staying.

New Zealand's desirable population size has always been a contentious subject, though not previously an urgent question. The increase since the turn of the century followed 25 years of static population figures as more people left than arrived.

Immigration policy was a notoriously capricious. Each time the economy dipped, governments would close the door. Now that we appear to have a rapidly growing population again, we need to be discussing how high we want it to go, and how it might be channelled to regions that most need it, and the houses and services it is going to need.

This country would benefit from many more people, and better preparation for their arrival.