Plans for a transtasman bubble with Australia could be rolled out on a state rather than federal level.
This is according to New Zealand Prime Minister Jacinda Ardern, who told Newstalk ZB the decision depends on the Australian government.
"The test for us remains the same. And our test could apply state by state or at a federal level," Ardern said.
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The Prime Minister refused to make any commitment on when this might happen, saying any moves were contingent on Australia's fight against the virus.
"We are in a good place at the moment," she said.
"Australia is really the one who has to make some calls about when they'll be ready."
Australian Tourism Minister Simon Birmingham suggested last week that quarantine-free travel between Australia and New Zealand could be in place as early as September.
However, the escalating outbreak in the state of Victoria has cast some serious doubt over whether it would be plausible for widespread travel to open between Australia and New Zealand by then.
Ardern told Newstalk ZB she is open to the idea of incorporating a travel plan based on the status of different states in Australia.
"Obviously, we won't be doing that with Victoria while they are where they are," Ardern said.
"One of the criteria for us is that they need to be where we are in terms of there being no community transmission."
If the transtasman bubble were to be incorporated on a state level, Ardern said New Zealand would need to ensure that the travel routes of the visitor were really confined to a certain state and that they hadn't crossed the border at all.
Some states in Australia have closed their borders to non-essential travel within the country. The borders of Victoria, New South Wales and the Australian Capital Territory all remain under strict restrictions and are being monitored by police.
Plans to relax these restrictions by July 20 were scrapped after the spike in the number of cases in Victoria.
The challenge for Australia right now will be to ensure the virus doesn't spread beyond Victoria into other states.
Ardern said that given there were still problems in certain states, any plans for a nationwide bubble including both Australia and New Zealand was some way off.
Asked about whether New Zealanders would be allowed to travel to Pacific countries, Ardern said that any plans for a transtasman bubble would also include neighbouring islands that want to be part of the agreement.
"The work we're doing on transtasman will apply to the Pacific. I've never said which will come first. It's all a matter of both sides being ready and having everything in order," Ardern said.
"Everything we expect of ourselves is what we're asking anyone we're doing quarantine travel with.
"The bottom line is that all that work is under way. We're not rushing. I don't think the Pacific should want to rush, and I take that very seriously. I could not live with myself if we were responsible for Covid in the Pacific."