Passport lifespans are doubling to 10 years but the cost of getting one could also double unless the Government spends more than $200 million subsidising the service.
Cabinet papers showed the cost of obtaining a passport needed to increase to $404 by 2021 if no Government money was spent to lower the cost, Radio New Zealand said.
Last month ministers voted in favour of increasing passports' lifespan from five to ten years.
The Treasury was opposed to the suggested increase from $135, which is what passports cost currently, to $180 because the amount would not cover the cost of producing the passports.
Initially, a fee of $225 was agreed on but after Internal Affairs Minister Peter Dunne met with Associate Minister Steven Joyce in April, it was decided that a fee of $180 plus a capital injection of $20 million would cover costs until July 2018, Radio New Zealand reported.
Mr Dunne called passports a "common good" and said Government spending was warranted to keep passports affordable.
"Well, it's something that we are very keen for New Zealanders to have and to enjoy. Significant numbers of New Zealanders use their passports to travel and so they should be encouraged to do so.
"My view, very strongly, was that if we were going to retain the cost recovery principle in full we would make that cost prohibitive for a number of people," Mr Dunne told Radio New Zealand.
Department of Internal Affairs deputy chief executive Maria Robertson said it was not the department's place to say how passports should be priced -- they just provided the service.
Ms Robertson said there were certain fixed costs in making passports which needed to be covered.
"In five years time, the volumes go down. So even though we move to a 10 year passport, say in the next six months, we still have high volumes of renewals for the next five years and then those volumes drop, significantly."
The drop in numbers could be as high as 60 per cent, she said.
"What that means is that we still have the same fixed costs as when our volumes are higher, but we have fewer passports to spread those costs over.
"In itself, the costs aren't going up but like with any operation if you have a high throughput and that drops down, you have to spread your costs over fewer numbers of output."
Ms Robertson said fixed costs included security and printing technologies.
"We have to buy or lease the machines that [print passports] regardless of what the validity period is and regardless of what our volumes are."
She said the passport price was "effectively the cost".
"The New Zealand passport is a highly valued, highly prized identity document worldwide.
"The reason for that is because of the rigor and the integrity of the service that internal affairs provides."
By the numbers:
$135 - The current cost for a passport
$225 - The cost ministers initially agreed on for a new passport
$180 - The price the Government finally settled on per passport, to be backed by a $20 million Government cash injection until July 2018
$404 - Treasury's estimate for how much a passport would need to cost, without any Government subsidy, by 2021
$218 million - Treasury's estimate for how much extra Internal Affairs would have to spend, in the six years from July 2021, without putting up passport costs