The Government has buckled to pressure and slashed immigration numbers.
For the next two years the effective cap on residencies granted will be cut by 5000 to a range of 85,000-95,000.
Immigration Minister Michael Woodhouse stressed he still thinks the Government's immigration settings are correct.
"Today's announcement demonstrates the Government is taking a responsible, pragmatic approach to managing immigration."
And the Government has more than halved the number of places granted to capped family categories to 2000 per year - down from 5500. As part of this move the parent category will be closed to new applications.
It will also be harder to gain a skilled migrant visa, with points requires to gain it raising from 140 to 160.
"Raising the points will also prioritise access for higher-skilled SMC migrants, ensuring we strike the right balance between attracting skilled workers that allow companies to grow and managing demand in a period of strong growth," Mr Woodhouse said.
"National have created a massive problem by bringing in huge numbers of unskilled migrants, and the Parent Category has meant their parents have flooded in also," New Zealand First Leader Winston Peters said.
"The plain fact is after years of denial, their polling is telling them the public are concerned".
David Cooper, Director of Client Services at Malcolm Pacific Immigration, said the Government's changes will make it harder for skilled migrants wanting to start a life in New Zealand.
Mr Cooper said that the reduction in migrants allowed under the parent category will mean "there will be queues of young migrants waiting for a long time to get Mum and Dad to New Zealand".