Government plans immigration changes as population grows at fastest rate since 1946

New Zealand's population over the second half of last year grew at its fastest rate since 1946, putting our total population now at just over 5.3 million people.

The Government is planning changes to immigration settings with Finance Minister Nicola Willis saying the door is currently open to too many low-skilled workers.

It may have been a long hot summer, but the Finance Minister told this week's Economic Forum storm clouds are looming over the Budget.

"We don't see that we're going to be flush with cash," Nicola Willis said.

The economy shrank last quarter, despite the super-hot immigration numbers adding demand.

For the year to December, New Zealand gained 126,000 people - with up to 60 percent of them living in Auckland.

"So we've just added, you know, 70,000 to Auckland's population in the last year," said Distinguished Professor Emeritus Paul Spoonley.

"And that's why we are forecasting, by the way, that over the next two decades, Auckland will grow by about half a million. And eventually, 40 percent of all New Zealanders will be Auckland residents.''

And that puts more pressure on roads, trains, houses, schools and health services.

Add in the ageing population and one medical specialist says the system can't cope.

"If you take one single phenomenon which is the growth of dementia, dementia is increasing by about 4 percent cumulative per annum. So we're now living long enough to start becoming demented," said Auckland University medicine Professor Des Gorman.

"It's not a new thing. It just means when we're living long enough to go past our biological use-by date."

To ease the pressure, should the migration tap be turned down?

New Zealand is not alone in dealing with the immigration balancing act.

Last year Australia's net migration gain was half a million people. Now they're looking at slashing that in half.

And now, our Government is planning tweaks to who comes in on a work visa.

"When you break that down and look at what skill level the people on work visas are at, a lot of them are very, very low-skilled. And that's the area that we are focused on," Willis said.

What's the magic migrant number? An almost impossible calculation.