Jacinda Ardern is offering Malcolm Turnbull a seriously good deal - if New Zealand takes 150 refugees, they can be banned from ever entering Australia.
Newshub has been briefed on the deal and can reveal that Ms Ardern is happy for Australia to place an order on any refugees that they can never travel there.
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This has previously been resisted, with official concerns that it would create a small group of "second-class citizens" in New Zealand that don't enjoy free access to Australia.
But New Zealand has relaxed its position on this, meaning Mr Turnbull is now refusing a very favourable deal. The NZ stance is that Australia can put a ban on the refugees, if they want - it's up to them.
Newshub has also learned that New Zealand is upset at the Australian media's leaking of official intelligence on how boats have been stopped from coming to New Zealand.
The leaks of classified information are being viewed as a 'dirty' retaliatory move by Australia in response to Ms Ardern's pressure.
Furthermore, New Zealand believes that US President Donald Trump is complicating the deal. Under a refugee deal with America, which Mr Trump has described as "the worst deal ever", some of the Manus refugees will be going to the United States.
But the deal is happening slowly, and Australia wants to get it sorted before any deal with New Zealand to avoid jeopardising or slowing the American deal further.
At the same time, New Zealand believes the United States will take 'higher quality' refugees off Manus first, leaving New Zealand with poorer quality.
It's believed that the need is urgent and should be done now.