"It's actually in order to manage the number of athletes who end up in the village. You can't just have several hundred extras arrive as was the case in Glasgow (in 2014).
"As a result (of the cap), each country has a country allocation for individual sports. Alongside that, we have a selection standard here in New Zealand.
"We've given sports a notional concept of what their maximum (numbers) will be. However, if athletes across a number of sports don't reach the standards, then those quotas, for want of a better word, can be moved around.
"It is slightly complicated."
Smith said athletes will still need to demonstrate that they are capable of a top six finish at Commonwealth Games level.
"If it ends up that there are more athletes in that bracket than there are spots available, we will need to look at how we navigate that across the whole team.
"So technically the selection standard is exactly the same as it was for Glasgow. For individuals and team, they must be medal-capable."
Smith said the high number of team sports set for the Gold Coast meant it was likely New Zealand would send a bigger team than past Games.