The number of New Zealanders granted permanent residency in Australia has plummeted.
Official figures show that only 45 New Zealanders were granted permanent residency in Australia in the eight months to February this year, compared with a high of 2500 in the 2012-13 year.
Aussie Malcolm, who was New Zealand's Immigration Minister under Sir Rob Muldoon, said it was time for the government here to respond.
"I don't think it's deliberate, I think it simply arises from the fact that Aussies think that we are not like them. Aussies see New Zealanders as foreigners who have to be controlled, that we're some sort of a threat."
Mr Malcolm, who is now an immigration consultant, said New Zealand needed to start treating Australians who stayed here the same way.
"And maybe it's time that we've just gotta say, 'I'm sorry, if you want to come and live in New Zealand, be treated like the rest of the world'.
"Because this prejudice by Australians against New Zealanders has gone on and on for 20, 25 years - I think it's time for New Zealand to call it quits."
Mr Malcolm said the Trans-Tasman Travel Arrangement was dead because there was no mutual respect.
Prime Minister Bill English has scotched suggestions of a tit-for-tat exchange, but also said Australia had given no assurance there would not be more policy changes that would affect New Zealanders across the Tasman.
A new pathway to Australian citizenship for New Zealanders will kick in on 1 July, but requires permanent residency and a hefty wage.
Some Kiwis seeking citizenship in Australia said there had been contradictory statements from the Australian government about how it would work.
Kent Peters, who lives in Perth and just got citizenship, said his wife Liesl was uncertain if she would be on the one-year fast-track or the new four-year slow-track announced in Canberra recently.
"One of the reasons the numbers has dropped is that it's an expensive process to do, the cost for the visas themselves is in excess of a few thousand dollars to apply," Mr Peters said.
A family of four with two children under 18 will pay $A7200 to get permanent residency, then another $A570 total for citizenship.
There has also been a drop in spousal visa numbers, with fees doubling in three years to almost $A7000 per visa.
Perth immigration lawyer Alisdair Putt said uncertainty was prompting many New Zealanders to get in touch with him.
"We're getting questioned a lot by New Zealand passport holders," he said.
"So one of the things we've done is we've published on our blog that it may be worthwhile for people thinking about making citizenship applications ... to consider sooner rather than later.
"Because, who knows when the legislative changes will be made and what date they'll come into effect from."