Kiwis facing study fees hikes in Australia 'a real crisis' - Winston Peters

Winston Peters says New Zealand's relationship with Australia is a farce, after the Australian government made a surprise decision to charge Kiwi tertiary students full international fees.

"Tens of thousands of young New Zealanders are over there. This is a real crisis for them," Mr Peters says.

"Their parents are earning in circumstances where they can't leave. If [young New Zealanders] want to go to university they may as well come home now because they can't afford to go to an Australian one."

Foreign Minister Gerry Brownlee had his first meeting with counterpart Julie Bishop on Thursday to discuss the continued cuts to entitlements for Kiwis living over there.

The ruling on New Zealand-born students' fees changed after the meeting, and the New Zealand First leader isn't impressed.

"We've got one decision after another that's been so damaging for New Zealanders to the extent that we are second-class citizens. Now we've got to take it seriously and get over there and seriously negotiate and turn that around."

Mr Peters was Foreign Minister in 2005, and says the trans-Tasman relationship has deteriorated significantly since then.

One Kiwi student completing a Masters in Australia has had her fees increased from $20,000 to $60,000.