ANZ New Zealand chief executive Antonia Watson is urging the Government to make the country's immigration settings more "flexible" to help businesses struggling with staff shortages.
"I totally understand that we want a more productive country. That will take years and investment," Watson said.
"In the meantime… people are just crying out for staff."
Watson made the comments to media at an event hosted by ANZ in Melbourne on Tuesday morning, which was attended by Prime Minister Jacinda Ardern, Tourism Minister Stuart Nash, and a 31-person strong business delegation from New Zealand.
"I understand there's the desire for a bit of a [immigration] reset, and in the long-term that could be a good thing for the country. We need to have planned better for the immigration we've had over the last few years," she said.
However, she said this transition needs to be balanced against the economy's current needs. Watson said a larger workforce would dampen wage growth, which is contributing to high inflation.
The Reserve Bank of New Zealand, in its May Monetary Policy Statement, said: "The share of annual wage increases greater than 5 per cent is near its peak prior to the  global financial crisis."
The unemployment rate was rock-bottom in the March quarter at 3.2 per cent, according to the latest Statistics New Zealand data. Meanwhile the underutilisation rate was low by historic standards at 9.3 per cent.
The Reserve Bank expects labour market pressures to ease in line with a closing output gap, and the unemployment rate to increase to 4.7 per cent by March 2025, as it tightens monetary conditions.
Watson maintained a larger workforce would also lower businesses' costs more generally, including finance costs, which add up if labour shortages delay the completion of projects.
Asked how she proposed the Government fixes immigration settings, Watson said: "The easy thing to say is to go back to how it used to be. Because we were able to import the labour that we needed."
But she said immigration needs to be "sustainable" and planned for.
"You can't blame Kiwis for wanting to go overseas… If they are wanting to go overseas, we have to replace that labour."
Provisional data published by Statistics New Zealand shows 80 more people left New Zealand than those who migrated here in April. In March, there were 926 more migrant arrivals than departures.
Annually, New Zealand's net migration has been negative since March 2021. In the year to April, 8668 more people left than arrived. This was a major drop from before borders closed due to Covid-19, when net inward migration peaked at 91,680 in the year to March 2020.
Infometrics principal economist and director Brad Olsen told the Herald he believed the issue with the immigration system is as much about the settings as it is about their implementation.
Settings have changed as Covid-19 has closed borders and had unexpected effects on the economy.
Olsen believed the slow pace at which the Government has opened the New Zealand border, as well as the Government's 2021 immigration "reset," focused on attracting high-skilled and high-net-worth individuals, sent a signal to potential migrants that they weren't welcome.
The Government then backtracked, as the labour market tightened more than expected.
Olsen supported it making work visa holders and critical purpose visitor visa holders eligible for residence under a "2021 Resident Visa". A whopping 203,413 people have applied for this visa, 60,029 of whom have had their applications approved.
Processing these applications, while catching up with the processing of offshore residence applications that were froze in 2020 and 2021, is making it difficult to get labour into the country quickly.
Olsen said that in January 2020, it took Immigration New Zealand 84 days to process 90 per cent of Essential Skills Work Visa applications. In May 2022, it took 120 to 150 days for that milestone to be reached.
Ardern told media the Government isn't planning to loosen immigration settings.
"We have worked very hard to identify the skills gaps New Zealanders have; the issues businesses are facing; and actually, to ease the path for those businesses to bring in those skills that we need. We've made significant changes to do that," Ardern said.
"In other areas that perhaps might not be areas where we're seeking those high levels of skills; where it might be in industries that traditionally have had lower wages; we're trying to maintain the wages and standards we have in New Zealand.
"Because otherwise, we unfortunately do see wages decreasing, potentially as a result."