An Official Information Act inquiry by Radio New Zealand has discovered that a Cabinet paper is in preparation relating the impact of immigration policy on New Zealand’s economy and on house price inflation.

In a report published today, New Zealand’s central bank, the Reserve Bank, has also proposed a cut in the number of migrants to cool the housing market. Other measures proposed by the Bank include building more houses and introducing a capital gains tax on people who sell houses they have been renting out.

Bill English, spokesman for the opposition National Party, said that immigrants are helping fill job vacancies and boost the economy and that higher interest rates will eventually cool the property market. Any bid to control housing prices by restricting immigration might have been possible some years ago, but it is now too late.

Peter Conway, spokesman for New Zealand’s Council of Trade Unions said:

“The CTU says that migration is a driver of house prices and that is why it is important for employers to look at ways to improve their use of labour and lift productivity through more technology, better workplace practices, and more investment in upskilling the current workforce rather than rely too much on migration. However the CTU does not support any blame being attached to migrants and believes that the main focus should be on lifting incomes and improving the supply of affordable housing.”

The Government says it is already making moves to reduce immigration. Immigration Minister, David Cunliffe told Radio New Zealand’s Morning Report that the number of immigrants allowed into the country this year will be at the low end of its targets.