Prime Minister Jacinda Ardern's plea to Australia's Malcolm Turnbull to reconsider a policy to charge New Zealanders living in Australia the same tertiary fees as international students fell on deaf ears.
Turnbull said while he understood the reaction in New Zealand, it was up to Australia to determine its policies in such areas.
"We respect each others' rights to lead and govern our own nations." He would not be drawn on whether he was concerned about an escalation in tit-for-tat policies.
Ardern said she would retaliate if Australia went ahead with those plans - especially given Labour's plans for three years of free tertiary education.
"What I've highlighted to the Prime Minister today is we have quite an expansive plan around tertiary education which will improve its accessibility.