The government has confirmed it sent aid money to North Korea for eight years, but stopped last year as the regime ramped up its nuclear programme.
A Korean People's Army (KPA) soldier stands between flags in Pyongyang Photo: AFP
Since 2008, the government has put $30,000 a year into a fund called the Embassy Fund for North Korea.
It was managed by the New Zealand embassy in Seoul and allocated to aid agencies to spend on humanitarian efforts.
Foreign Minister, Gerry Brownlee, said it was a very small amount of money but had been suspended.
"You could make a case to say that every bit of aid you spent, effectively gives them some dollars to spend on their [nuclear] programme.
"We haven't, for that reason, been contributing anything to North Korea since the missile testing started."
Mr Brownlee said, as far as he was aware, all the money went toward humanitarian efforts.
"One of the things it was used for, for example, was buying utensils for children who are in orphanages," he said.
"We're pretty disappointed about the whole situation in North Korea. The isolationist approach that the government is taking there will be having quite an adverse effect on far too many people in North Korea, including children."