Prime Minister John Key has come under heavy fire for his acceptance of Australia's right to discriminate against New Zealanders living in Australia.
Mr Key said after meeting Australian counterpart Tony Abbott in Canberra on Wednesday that he acknowledged a deal between the previous governments of John Howard and Helen Clark that in February 2001 led to the exclusion of expats from most government support and welfare programmes.
He said he "totally respected" Australia's sovereign right to make decisions about its treatment of people who came to live and work in Australia.
But his acceptance of Australia's position has further inflamed New Zealand advocates mounting a growing crusade against the rules that require Kiwis to pay full taxes without receiving the benefits.
Critics reject claims the rules were part of a social security agreement.
Australia imposed the rules unilaterally after the two governments failed to reach a deal on harmonisation of immigration policies and recompense for welfare payments to the citizens of each other's country.
The advocacy group OzKiwi yesterday lambasted Mr Key.
It said Australia had forfeited its sovereignty regarding human rights abuses against children, the disabled, and people of a particular nationality. by signing the same international human rights treaties as New Zealand.
"As the Prime Minister of New Zealand, are you saying that Australia is free to completely ignore its international human rights obligations concerning the treatment of New Zealanders permanently residing in its territory?" OzKiwi said in a statement.
"If the previous New Zealand Government really did agree to human rights violations against its own citizens, then why can't you simply terminate the agreement?
"If you are perpetuating such a purported discriminatory agreement then why aren't you yourself in breach of the racial discrimination provisions of the New Zealand Human Rights Act?"
Labour's Foreign Affairs spokesman, David Shearer, said Mr Kay had an obligation to stand up for the rights of New Zealanders no matter where they lived.
"Under this Government the rights of Kiwis working abroad have gone backwards," he said.
"Why is it fair for New Zealanders to pay taxes in Australia, some for more than a decade, but not receive the benefits that those taxes pay for?
"Mr Key was full of bombast before his flying visit to meet with Tony Abbott.
"He's returned home with his tail between his legs."
Professor Grant Duncan, of Massey University's School of People, Environment and Planning, wrote in the Australian academic website The Conversation that expat Kiwis faced social exclusion.
"On the ancient principle of 'no taxation without representation' it is unfair that - as taxpayers in Australia - they have no right to vote on the government they pay for, and no political clout to influence Australian social policy," he wrote.
A spokeswoman for the Prime Minister said Mr Key stood by his comments and that the Government would continue to raise the issue when it met with its Australian counterparts.