Australian politicians have ruled a proposal to take away university subsidies from Kiwi expats is discriminatory.
As part of a bid to slash spending in its budget, the Australian government in May proposed changing tertiary education subsidy rules so New Zealand expats and permanent residents would no longer get domestic student subsidies.
Some Kiwis living in Australia feared their uni fees would triple as a result.
Now Australia's Parliamentary Joint Committee on Human Rights has voted unanimously that the change is discriminatory, despite the fact it would also give New Zealanders access to student loans, which have largely been off limit.
"This does not address the concern that the removal of the commonwealth subsidy for New Zealand citizens and Australian permanent residents directly discriminates against [them]," the committee said.
"This group will have to pay fees - either up front, or repaid over time - that are substantially higher than Australian citizens."
While the report is not binding, it will now be sent to lawmakers for consideration.
"The discussion below is intended to assist legislation proponents," the committee said.
The change caused a brief spat between the two countries in May, with Prime Minister Bill English saying the New Zealand government had been left "pretty unhappy about it".
Australian Foreign Minister Julie Bishop said she expected with the loan change, more New Zealanders, not fewer, would be accessing higher education in Australia.