A parliamentary report into New Zealand's relationship with the Pacific Islands has called for a semi-amnesty on overstayers, saying Immigration should go easy on otherwise law-abiding overstayers who front up.

The inquiry by the foreign affairs select committee began under the Labour government in 2007 and has taken four years to complete, including visiting several island nations.

Although it predominantly looked at Pacific countries, it also addressed the plight of Pacific Islanders in New Zealand saying it was concerned that overstayers' children were not getting the education or healthcare they needed because parents were afraid they would get caught.

The committee rejected calls for an amnesty, saying it would send the wrong signal about respect for the law.

However, it recommended immigration give "sympathetic consideration" to granting residency for otherwise law abiding overstayers who were well-settled and who voluntarily approached Immigration. It also proposed extending the regional seasonal employment scheme to reduce the incentive to overstay.

The report also called for more attention to be given to countries for which New Zealand has some constitutional responsibility - Niue, the Cook Islands and Tokelau - as well as Polynesia and Kiribati.

It said the Government should ensure those countries received similar standards of health, education, policing and justice services that a town or city of similar size would expect in New Zealand.

Rules for pension eligibility should also be relaxed so people could return or move to those islands without affecting their pensions. Such a move would help the economy of the islands as well as injecting that money directly into the economy rather than filtering it through "island bureaucracies".

Foreign Minister Murray McCully said the Government would give consideration to the "thought provoking" recommendations before giving its formal response, due next March.

He was already considering the pensions issue, saying there was currently a "massive incentive" for people who would otherwise want to go to the islands to instead remain in New Zealand for pension eligibility.

However, other recommendations were likely to be expensive and required fuller thought.

Overall, the report said the $600 million in aid should be closely focused on the Pacific rather than spread too thinly wider afield.

It recommended more investment in young businesses, including the setting up of a $100 million fund to lend money for new business ventures and providing natural disaster insurance to give investors more confidence.

The committee said it was "deeply concerned" about the welfare of the people of Fiji following the December 2006 coup, but endorsed the sanctions.

Committee chairman John Hayes said the report was the most significant review of relationships with Pacific countries in more than 25 years.

(Source Claire Trevett, NZ Herald)