The surge in the net inflow of permanent and long-term migrants under way at the moment is largely driven by fewer New Zealanders leaving for Australia and more returning.
That trend is liable to swing the other way again when the Australian economy picks up again and the income gap between the two countries reasserts itself. It is not something that the New Zealand Government can regulate.
Nor is it convincing - though it may be politically expedient - to suggest that it can compensate for that volatility by fine-tuning the target range for permanent residence, which stands at 135,000 to 150,000 over three years, equivalent to about 1 per cent of the population a year.
The Kiwi components of the net flow of migrants - the result of decisions by tens of thousands of people - can change rapidly; the current surge was not forecast.
But the administrative lags involved in responding to that via the residence target in any remotely civilised way would be considerable, running the risk that by the time the adjusted target took effect the cyclical factors would have changed and the net effect would be to amplify the cycle rather than counter it.
Tweaking the target also raises the question of which category of immigrant to throttle back.
Skilled migrants, who accounted for 50 per cent of resident approvals in the second half of 2013? Or family members of existing residents (42 per cent)? Or refugees?
Still, we are left with a clear link between net migration and house prices.
Research at the Reserve Bank late last year found that a net inflow of migrants which added 1 per cent to the population - and current forecasts say we will approach that rate later this year - is associated with an 8 per cent increase in real house prices over the following three years.
The strong relationship between migration and house prices does not necessarily mean the former is driving the latter, however. It may be that both are the result of a common cause, like a rise in confidence about the economic outlook.
And the rise in house prices may reflect expectations that the population surge will continue for longer than it does.
Clearly, any policy response has to start with measures to increase the economy's capacity to respond to surges in demand, especially for housing.
The sluggishness of the response, which can be laid at the door of both local government and the building industry, is a real problem.
As economist Julie Fry in a Treasury working paper released last month says, a speed limit is effectively imposed on the economy if population increases quickly choke off performance through some combination of housing market and interest and exchange rate effects.
She gives some credence to the view propounded by Wellington economist Michael Reddell that a root cause of New Zealand's disappointing economic performance since the reforms of the late 1980s and early 1990s is the policy adopted then of increasing gross immigration.
There is a link, Reddell argues, between the fact that New Zealand's population growth has been significantly stronger than the OECD median and the fact that our productivity and per capita incomes have continued to languish well below the OECD median. "A shortage of labour, skilled or otherwise, is not and has not been at any time in recent history the most obvious gap in New Zealand's growth performance and prospects," he says.
Instead he argues that the investment needed to accommodate the growing population - housing, infrastructure, schools and so on - when combined with our not very impressive national savings rate has resulted in stubbornly high interest and exchange rates, and crowded out investment in the sectors which earn the country's living as a trading nation.
A middling ratio of investment spending to gross domestic product by OECD standards masks a higher ratio of government investment to GDP and a low rate of business investment both as a share of GDP and per worker, Reddell says.
But Julie Fry notes other possible explanations than Reddell's thesis for our underperformance on the productivity front: "New Zealand is also small and isolated, which raises the cost of efficiency-enhancing trade and contributes to small firm and market size and low intensity of competition, which dulls incentives for efficiency and innovation."
The OECD has done work on the fiscal impact of migration for all its European members as well as Australia, Canada and the United States.
"The study suggests the impact of the cumulative waves of immigration that arrived over the past 50 years in OECD countries is on average close to zero, rarely exceeding 0.5 per cent of GDP in either positive or negative terms," itsays.
"Immigrants are thus neither a burden to the public purse nor are they a panacea for addressing fiscal challenges."
