The Labour-led Government's offer to take 150 asylum seekers is being blamed for an escalation in people-smuggling operations with New Zealand being marketed as a "back door" into Australia.
The Australian is reporting fears the latest Manus Island resettlement offer has sparked an increase in "chatter" in recent months with New Zealand mentioned as the final destination.
Last month an Australian naval patrol intercepted a boatload of 29 Sri Lankans off the coast of Western Australia. Those on board told Australian authorities they were bound for New Zealand.
The Australian said Sri Lankan authorities disrupted two people-smuggling ventures in their waters late last year in which the asylum seekers were also headed for New Zealand.
The newspaper quoted a source saying there was evidence the recent spike in people-smuggling activity marketing New Zealand had followed the Ardern government's offer to take asylum-seekers from the Australian offshore detention centres.
The source within the new Department of Home Affairs said there had been recent "high level" chatter from countries such as Sri Lanka and Indonesia in which New Zealand was being pushed as a destination for asylum-seekers.
"It confirms what our intelligence has been telling us: people-smuggling syndicates remain active in our region and continue to market their services using false promises of settlement in Australia or New Zealand," said the source.
"Whether or not people-smugglers genuinely intend for their boats to reach New Zealand, it is clear that they are using publicity around New Zealand's resettlement offer to market their services to vulnerable people in Sri Lanka and elsewhere."
However it appeared there was little likelihood any boat would reach New Zealand, leaving Australian authorities to deal with boatloads of refugees.
Last year Prime Minister Jacinda Ardern criticised Australia's offshore processing policy and offered to take 150 men from Manus Island.
The Australian says it is believed New Zealand authorities have been alerted to the developments through the Five Eyes intelligence network.
But rather than point the finger at the New Zealand Government for the sudden upsurge the ruling Australian Liberal Party is accusing opposition leader Bill Shorten for supporting the resettlement deal.
Home Affairs Minister Peter Dutton told the Australian his support for the offer was irresponsible and could put their country's border control efforts at risk.
The Australian government has rejected the New Zealand resettlement offer saying it would create "pull" factors for asylum-seekers to risk making hazardous boat journeys to New Zealand believing they will one day be able to live in Australia.