Australia is increasingly recognising it needs to provide social safety nets such as welfare for New Zealanders who have settled there, the Ministry of Foreign Affairs and Trade says.
About 500,000 New Zealanders now call Australia home, and 200,000 arrived after a 2001 rule change which did not guarantee social security to Kiwis unless they gained permanent residency status.
The ministry's deputy secretary Australia, Pacific, and Europe Group, Chris Seed, said 40 per cent of New Zealanders who had left for Australia after 2001 were eligible to upgrade their visa, but only 5 per cent had chosen to do so.
"The numbers would suggest that most New Zealanders actually thrive and survive in Australia."
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But he noted that the Australian Government had realised it needed to provide fairer access to benefits such as welfare to long-term New Zealand expatriates.
He said a joint Productivity Commission was likely to recommend changes, but he did not know how soon this would happen.
"What we're seeing in the Australian system is a recognition that for their own domestic reasons they have to tackle the growing group of New Zealanders who, for historical reasons, don't have access to all the benefits that they might need to."
Labour Party foreign affairs spokesman Phil Goff said New Zealanders were contributing around $2.5 billion in income tax in Australia, and deserved to be treated as more than "guest workers".
"You've been there, paid your taxes, you've been a good citizen, aren't you entitled to those safety net provisions, or are we as New Zealanders just guest workers as the Turks are in Germany?"
He said the Closer Economic Relations agreement should, like the European Union, ensure that expatriate New Zealanders were entitled to the same rights in Australia as in their home country.