Cutting welfare was New Zealand's idea

The Government appears to have initiated the proposal to end New Zealanders' right to receive welfare benefits in Australia.

A set of papers show that the cabinet asked NZ negotiators to sound out Australia on whether it would accept a "fresh approach to social security arrangements endorsed by cabinet."

The Herald reported on Saturday that under a proposal due to be implemented in March, most welfare entitlements would no longer be paid to New Zealanders living in Australia unless they were successful in claiming permanent residency.

Prime Minister Helen Clark has said the alternatives were to keep sending larger and larger cheques to meet Canberra's demands, or for Kiwis to lose automatic social welfare entitlements.

But the papers said: "New Zealand's preferred option" was to "indicate willingness to consider replacing the reimbursement arrangement with cost-sharing or direct payment, under which New Zealand would partially cover only the age pensions of its citizens living in Australia, on the basis of their period of working-life residency in New Zealand."



It also says the first round of talks with Australia confirmed Canberra's acceptance of the "negotiability of the fresh approach to bilateral social security envisaged by New Zealand ministers."

"Instead of increasing New Zealand's fiscal contribution and expanding the scope of the current reimbursement arrangement to meet Australian concerns, there would be a new long-term agreement covering only superannuation/age pensions, while access to other social security benefits would be left to each country to decide."

Helen Clark did not respond to requests for comment last night.

But in Parliament yesterday she said: "This is not an Australian Government proposal. This is a negotiation which starts with the right of Kiwis to move freely across the Tasman ... If we wish to assert that Kiwis are to go across the Tasman and live on the taxpayer on the dole, we will have to pay hundreds of millions of dollars. "

Helen Clark was repeatedly asked whether Labour's change in immigration policy led to Australia's taking a harder stance, but said, "That issue has no particular relevance to talks."

During question time she reiterated that the Government's priority was to preserve the right for New Zealanders and Australians to travel and work in each other's country and implied that attempting to preserve the social security arrangements would put this at risk.

New Zealanders living in Australia before the policy was implemented would not be affected by the changes.

New Zealanders have an automatic right to permanent residency, and consequently welfare entitlements, after living two years in Australia.

New Zealand pays about $169 million a year to Australia for social security but Canberra has long insisted that Wellington should pay more towards the welfare of Kiwis living across the Tasman.

The Australian Bureau of Statistics says 404,800 New Zealanders were living in Australia on June 30 last year - the latest figure available - and more than 226,000 had been resident for more than 12 months.

- NZPA