Immigration policy is "disconnected" from infrastructure and housing supply, according to findings from the Productivity Commission.
It has released its preliminary findings and recommendations into its immigration inquiry, and says New Zealand has struggled to absorb and accommodate more people.
The commissioner Dr Ganesh Nana said infrastructure and housing supply has not kept up with population rises, affecting the wellbeing of both migrants and New Zealanders.
"To ensure immigration contributes to the productivity and well-being of New Zealanders, governments need to build the assets and infrastructure needed to support a growing population, in preparation for the number of new residents, ahead of time," Nana said.
The commission recommended a number of changes.
"One of the recommendations is [for] the government to regularly issue what we call Government Policy Statements about immigration, where they're obliged to set the objective for immigration but also make clear how those objectives and policy settings are linked to our absorptive capacity, our education and training efforts, and our housing infrastructure and our community efforts."
The commission also wants the government to remove visa conditions that tie a migrant to a specific employer.
"We suggest that sets up behaviour that's not helpful either to the migrant or to the employer. What we want is for migrants to be encouraged to come here and settle for the long term," Nana said.
There were sporadic examples of migrants being vulnerable to exploitation, he said.
"Rather than tying a migrant to one specific employer, we may tie that migrant to an industry, occupation or region."
Nana also said the number of temporary migrant visas with pathways to residence should be linked to the number of residence visas on offer.
"Large queues for residency have left many migrants in flux and unable to settle. The mismatch between migrant expectations and the reality of residence falls well short of manaakitanga, and is not good for our international reputation as global competition for some skilled migrants intensifies."
Another recommendation was that Treaty interests should be recognised in immigration, Nana said.
Public submissions on the proposals are open until Christmas, with the final report set to presented to the government by April.