Key Points:

New Zealand's immigration policies attract far fewer skilled migrants than suggested and while good at building new suburbs are bad for the economy, says a Massey University academic.

Dr Greg Clydesdale, an economist who lectures in management and international business, said there was conflict between those who wanted to cut immigration to reduce house price pressure and those who saw the need for skilled immigrants.

Dr Clydesdale said the solution would be to cut back on immigrants who did not bring in skills.

Drawing on the Department of Labour's migration trends 2004 data, he said only 15 per cent of immigrants had skills the country needed.

Forty per cent came on humanitarian grounds, under the Pacific quota or were sponsored by their family.

Dr Clydesdale did not suggest stopping immediate families, but said numbers could be cut in the family sponsorship and humanitarian areas.

He said there was a tendency to believe those coming in under the skilled section were doctors, nurses or engineers who would fuel growth in the economy.

"However, a large number of the skills asked for are infrastructure builders to accommodate the population growth that they are fuelling. Alternatively they are people like travel agents and truck-drivers, occupations that add little to long term growth."

The effect was new suburbs emerging, not new industries, which went a long way in explaining New Zealand's poor economic performance.

He said the housing spirals in the 1990s and after 2001 were both associated with a rise in immigration.

Lesley Haines, the Department of Labour's group manager workforce policy, said the skilled migrant category was designed to ensure a match between the skills migrants brought and what New Zealand needed.

"More than a quarter of approved permanent residence applicants in both of the last two financial years were skilled migrants. The remainder are business people, and the partners of those skilled migrants."