Illegal overstayers with construction skills could be allowed stay in New Zealand to help build the 100,000 homes promised by the Government's flagship KiwiBuild project.

The construction industry was already struggling to find an extra 56,000 workers by 2022 to cope with demand, according to a Ministry of Business and Innovation report published last year.

The Labour-led government wants to build 100,000 affordable homes within 10 years and Immigration Minister Iain Lees-Galloway has already signalled more migrant tradies will be needed to build them.

But the shortage of skilled workers in New Zealand means an illegal workforce has flourished.

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In one case, nearly 200 illegal Malaysian workers were deported, fled the country or stopped at the border following a six-month investigation into Auckland's construction industry, the Weekend Herald revealed in February.

Investigators from Immigration New Zealand targeted 10 companies to disrupt the flow of illegal workers from Malaysia, who were responding to advertisements on social media.

Operation Spectrum raided construction sites around Auckland and detained and deported 54 people who were working unlawfully as plasterers, painters, tilers and carpenters.

But instead of being deported, illegal workers with construction skills might now be granted visas to work on the KiwiBuild project.

The idea has been raised with the Minister and discussed within Immigration New Zealand, according to several sources.

This was downplayed but not denied by a spokesman for Mr Lees-Galloway.

"We're not considering that right now. The Government will have some proposals for consultation coming out in the near future relating to construction industry and we'll look forward to hearing views from the public and business community," the Minister said in statement.

The proposals are unlikely to be made public until after the Labour-led government's first Budget is announced on May 17.

There were 747 people unlawfully in New Zealand deported in the 2016/17 financial year, as well as another 1437 who left "voluntarily".

But it is unknown how many had building or construction related skills.

As part of its election campaign, Labour - as well as New Zealand First and the Greens - promised to cut net migration.

A "KiwiBuild" visa was also discussed, where residential building companies could get a three-year visa for skilled migrants as long as they trained a local apprentice as well.

Michael Woodhouse, the National Party immigration spokesman, said Labour would be "hypocritical" if it allowed unlawful builders to stay in country after campaigning to cut immigration.

"There is no good reason to legitimise a person's immigration situation just because the construction industry is short of people," said Woodhouse.

"Amnesties don't work. That leads people to think if they if they stick around long enough, they'll eventually get a valid visa. That causes more unlawful migrants, not less."