The Government then planned to categorise high and low-skilled temporary work visas depending on how much a person earned; introduce a three-year limit on how long low-skilled workers could stay; and impose a one-year stand-down period.
The planned crackdown on temporary work visas came six months after the Government raised the bar for the skilled migrant visa. Record immigration is a hot topic in the forthcoming election.
In an interview yesterday on Radio New Zealand's Morning Report, Prime Minister Bill English said he "wouldn't describe it as a U-turn'', but confirmed proposed changes to skilled migrant visa conditions were under review following complaints from businesses and the regions.
Mrs Nicholls said in an interview growth in construction and hospitality had outstripped local supply, creating jobs for many temporary migrants.
It was also occurring in rural and provincial areas where local labour supply could not meet the demand for farm work.
"We have skill shortages in our region and we are welcoming international and domestic migrants.
"I am not seeing any evidence migrants come to our region at the expense of local employment opportunities.''
The hospitality industry was concerned with the immigration changes, particularly in Central Otago where employers were struggling to find enough staff, she said.
The recognised seasonal employer (RSE) scheme continued to operate and was important to the region.
In Central Otago, the horticulture and viticulture industries could not operate without the scheme, which had been operating successfully since 2007.
Growers could hire seasonal workers from the Pacific Islands, but only if no New Zealanders were available to do the work.
Growers had appreciated the assistance provided by the Ministry of Social Development, which reviewed the requirements of growers and considered New Zealanders looking for work and students seeking holiday work before implementing a seasonal worker category.
"We appreciate the support for export education, which is very important for our region. This brings overseas students to the university, polytechnic and into our high schools. These students provide significant economic benefit and some are able to stay as highly skilled permanent migrants.''
However, employers were concerned too many young New Zealanders were leaving the education system with skills not relevant to a modern economy, Mrs Nicholls said.
The education system needed to be more responsive in providing the key skills need. It was important business worked with the education system to ensure that happened.
Mr English told RNZ that the Government would "adjust not shelve'' the changes, adding there was strong demand for skilled workers to build houses and roads.
Mrs Nicholls said New Zealand work visa settings should be demand driven and more responsive to changing economic and labour market conditions.
Employers also wanted certainty over access to the international labour market to give them the confidence to invest and expand their businesses.
"There also need to be measures to address the skills, motivation and drug issues in the domestic labour market.''
