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Canberra urged to remove blocks on Kiwis

Australia should remove barriers preventing New Zealand migrants from gaining permanent residency or citizenship, the productivity commissions of both countries say.

The commissions' final joint report to both governments on strengthening trans-Tasman economic relations addresses the status of the estimated 280,000 New Zealand residents who arrived since 2001 and are on temporary or special category visas.

The Australian Multicultural Council has described them as "permanent second class" residents.

They are denied voting rights, access to unemployment, sickness and other benefits, and student loans.

The commissions' report says Australia's selection criteria and quotas for permanent residence - a prerequisite for citizenship - may prevent more than 100,000 "temporary" New Zealand residents ever getting it.

For instance, they must be under 50 and the ease with which New Zealanders can be employed by Australian businesses means that certain occupations may never be "in need" of skilled migrants qualifying for permanent visas.

The commissions say "the undesirable social outcomes experienced by a small but growing share of these `indefinite temporaries' may develop into a point of irritation within the trans-Tasman relationship.

"The commissions understand that both governments are aware of the situation and that the Australian government is working towards a resolution."

This requires Australian policy changes "including the development of a pathway to achieve permanent residency and/or citizenship".

Meanwhile, the commissions say both governments should ensure New Zealanders contemplating living in Australia know their obligations and entitlements.

That is among 28 recommendations in the report commissioned by the governments ahead of the 30th anniversary of Closer Economic Relations between Australia and NZ on January 1.

The report says the agreement is more prominent in NZ than in Australia, because the latter economy is seven times bigger and it is NZ's biggest export market. But NZ is a major market for Australian manufactured exports and tourism, and Australians hold about $A74 billion ($NZ93b) of investments in NZ.

Monetary union is dismissed as an option, with little support "following the recent euro area experience".

But the final report pursues trans-Tasman tariff reductions and aviation market liberalisation proposals that have already been opposed by unions in both countries when included in an earlier draft.