Prime Minister John Key says the Government will continue to lobby Australia over citizenship for future arrivals.
But for now he is happy with yesterday's limited win and congratulated Australian Prime Minister Malcolm Turnbull for his leadership on the issue.
Mr Turnbull announced a new income test, allowing about a third of the 305,000 New Zealanders who settled in Australia after February 2001 to gain citizenship if they earned A$53,000 ($57,000) for five consecutive years.
"It is in recognition of the advocacy that John Key has made on behalf of the many New Zealand citizens in Australia who are working here and are part of our community," Mr Turnbull said.
Others arriving in Australia from today will have to use other skilled migrant categories to gain citizenship.