Foreign Minister Nanaia Mahuta says she would be concerned at any moves in Australia that could increase the number of New Zealand citizens being deported.
The Australian government is working through changes to its Migration Act, which would give the immigration minister more power under the "character test" to deport people who have been convicted of a crime.
The existing law has seen thousands of New Zealand citizens who had lived in Australia, many spending almost their entire lives there with families and support networks, sent to New Zealand.
The Sydney Morning Herald has reported the bill also now has the support of Australia's opposition Labor Party, meaning such legislation would likely remain in place even if there was a change in government during the federal election this year.
Mahuta said New Zealand had "raised the issue of deportations a number of times with Australia".
"We don't agree with the policy and would be concerned at any moves to strengthen it.
"New Zealand accepts that Australia has the right to deport people.
"However, we are concerned that Australia continues to send people to New Zealand who have never lived here and have no family or support networks at all."
In a statement Australia Immigration Minister Alex Hawke said the bill would "broaden the circumstances in which visas may be cancelled and refused, and reduce the likelihood of such decisions being overturned on appeal".
"Since the power will be discretionary, the Government will have flexibility to focus on serious crimes perpetrated by criminals who pose a risk to the Australian community," he said.
Hawke also referred to the recent situation around Novak Djokovic.
"An Australian visa is a privilege that should be denied to those who pose a threat to the safety of Australians.
"It should not be easier to deport an international sports star than a convicted criminal.
"That's why this Bill broadens existing discretionary powers to cancel and refuse visas under the 'character test'."