Immigration Minister Iain Lees-Galloway says he is looking at ways of encouraging more skilled immigrants to become residents - after a drop of several thousand in one year.
Overall new resident numbers fell from 47,684 to 37,948 in the last financial year and almost three quarters of the change was down to a decrease in skilled immigrants.
Association for Migration and Investment chair June Ranson said the government had been trying to make it harder to get residence visas.
"They have made it tougher on people trying to get residence but I think in some respects this is going to backfire," she said.
"Employers need these people and while people may be happy to come in on work visas there's an expectation that they can, in fact, progress to residence."
While resident numbers fell, temporary work visas were on the rise, up 4000 to more than 230,000.
National Party immigration spokesperson Michael Woodhouse said this was the opposite of what the government said it would do.
"So we have this almost perverse trend at the moment where we're getting very high numbers and increasing number of lower skilled workers coming in on temporary visas but lower numbers of higher skilled workers gaining residence," he said.
"That's a significant drop at a time when our economy most needs skilled migrants.
"I have no doubt that the dark hand of New Zealand First in the background is influencing that trend."
"That's a significant drop at a time when our economy most needs skilled migrants"- National Party immigration spokesperson Michael Woodhouse
New Zealand First was concerned about the number of new residents and the rules were being enforced more stringently as a result, Mr Woodhouse said.
"While the Ministry of Business, Innovation and Employment (MBIE) says there is no government directive in respect of this, that is a dramatic drop that can't be explained only on the current visa settings," he said.
"One of the anecdotes that we've heard both from employers looking for essential skills visas applications and those applying for residency is that very spurious grounds for declining or for deferring applications are being used by Immigration New Zealand.
"The process is slowing down, the quality of the decisions is poorer by MBIE's own measures of their performance and that speaks I think to an attitude towards granting visas generally but residence in particular under this government."
He denied the fall was down to changes that his government made to visa settings when in power.
Immigration adviser Arunima Dhingra said fairness was a question that was coming up more and more.
Wait times for visas, rapid and frequent changes in policy and a hard line in decision making were all taking their toll on New Zealand's attractiveness to skilled workers, she said.
"We used to have a lot of credibility and I hope it comes back but with the changes that have happened and I think especially with the way they have been announced we are at risk of losing our credibility," she said.
"We are so far away from the rest of the world, our brand is really important to how we sell the country and how people come in."
Immigration New Zealand said the fall in skilled immigrants was expected, and was down to the policy changes made in 2016 and 2017 - raising the threshold to qualify for residence and the introduction of remuneration criteria.
It said the changes were made to ensure that only highly-skilled and highly-paid immigrants were eligible for residence.
Immigration Minister Iain Lees-Galloway said he was considering ways of lifting the numbers.
"It is something I'm looking at, whether we can do a better job of targeting skilled migrants and providing opportunities for them to achieve residency," he said.
"At the moment I don't think the residence programme is sufficiently well targeted."
He denied the decrease in numbers was down to government policy or New Zealand First influence.
"Michael Woodhouse need look in only one direction regarding residency numbers and that is in the mirror.
"He is speculating and relying on anecdotes, there's absolutely no truth to what he is saying, what we are seeing is the flow-on effects of changes that he made when he was the minister."