Tens of thousands of New Zealanders will be excluded from Australia's new national disability insurance scheme.

Legislation to establish the new safety net has been introduced by Prime Minister Julia Gillard and has the backing of the federal Opposition.

But it has become the latest welfare measure to specifically exclude New Zealanders who arrived after February 2001 and have not gained permanent residency or citizenship.

New Zealanders arriving after that date are automatically issued "non-protected" special category visas, which allow them to live and work indefinitely in Australia but refuse them access to most federal benefits and support payments, ranging from the dole to student loans.


Kiwis were recently excluded from new benefits available to all other Australian residents for injuries caused by acts of terrorism overseas.

The exclusions were imposed unilaterally by Australia as a response to concerns about the cost of welfare payments and "back door" immigration through New Zealand by Pacific Islanders and Hong Kong Chinese.

The rules define non-protected SCVs as temporary visas, and confine support only to those recognised as permanent residents.

Australia's Racial Discrimination Act bans discrimination on the basis of country of birth, but allows it on the basis of nationality.

Federal rules have also increasingly been adopted by the states for an expanding range of support measures, including government and emergency housing, student travel concessions and disability support.

Queensland has introduced amendments to its anti-discrimination laws to protect the state Government from legal challenges, following recent court action including a claim by disabled New Zealander Hannah Campbell. The case was settled out of court.

The new federal disability insurance scheme, intended to start in July next year, is designed to ensure adequate support to all disabled Australian residents.

Introducing the bill, Ms Gillard said the disabled could not bear their burdens alone but, relying on public provision, were forced to endure a level of care that was often shameful and generally insufficient.


She said that because the risk of disability was universal, the response must be universal.

But this does not extend to New Zealanders on non-protected SCVs.