New Zealand's government would rather keep relations with Australia sweet than start a mutual "armed war" over the treatment of citizens, as the latter announces another policy disadvantaging resident New Zealanders.
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Prime Minister Bill English said the government was "pretty unhappy" about a new tertiary policy that would significantly increase fees for New Zealanders studying in Australia, but New Zealand has no plan to retaliate.
He said the Australian approach was driven by the need to balance the books, and New Zealand would continue to take a constructive approach.
In his first overseas call as Foreign Minister, Gerry Brownlee will meet with his Australian counterpart Julie Bishop on Thursday.
Mr English said the new tertiary policy would be on the agenda.
"Conveying our unhappiness about it and that we want a serious discussion with them about where they're headed with this policy, rather than announcements that are made either without telling us or at short notice."
Mr English spoke with Australian Prime Minister Malcolm Turnbull to get clarification about citizenship for New Zealanders after another policy announcement out of Australia last week. He said Mr Turnbull made no mention of the changes to tertiary entitlements during their conversation.
"The Prime Minister of Australia has always acted with good will towards New Zealand ... The next step is to have a discussion about where the policy is going so New Zealanders in Australia understand what future impacts there are likely to be."
He said that would be needed to gauge the effect on "the traditionally close relationship and special treatment of New Zealanders ... and Australians in New Zealand".
There has been plenty of debate in recent years about policies introduced by Australia such as those involving the so-called 501s - New Zealanders with criminal convictions being detained and deported - and affecting New Zealanders' access to entitlements such as benefits and the National Disability Insurance Scheme.
Mr English said New Zealand did not intend to develop policies to punish Australians living here.
"We prefer to be in a situation where we have a positive relationship with Australia and Kiwis get a good deal in Australia - that's better than mutual 'armed war' to see who can treat each other's citizens worse."