NEW Zealand has a creative way to reduce unemployment - fund Kiwis' one-way airfares to Australia so they can find work and not be paid the dole back home.

The airfare payments last night left the government red-faced - with its Social Development Minister putting an immediate stop to any further hand-outs and saying the grants had been inappropriately handed out by case managers in dole offices.

The New Zealand Labour party introduced a transition to work grant in 2007, but now in opposition its MPs are attacking the current conservative National Party for using it "discretionally'' to relocate Kiwis on the dole to Australia.

Since then Kiwis receiving the dole have been able to apply for money to migrate to Australia, if they could prove there was a job waiting at their destination.

Sia Aston, a spokeswoman for social development minister Paula Bennett, was unable to say how many grants had been paid but said a manual audit of 500,000 files was underway. That could take "days or weeks''.

What was known is that in the regime's first year 16 people had their airfares paid. It is unclear whether airfares to countries other than Australia were paid.

Ms Aston said the transition grants - up to NZ$1500 ($1200), but on average NZ $363 - were usually paid to fund clothing used for job interviews.

"Some of these people have zero income,'' she said.

To get a grant, applicants had to say what was standing in the way of their gaining employment. In some cases, that would appear to be lack of a ticket to Australia.

Similar grants would not be given to Australians wanting to move to New Zealand for work, according to the Department of Education, Employment and Workplace Relations.

Over recent years New Zealand has continued to haemorrhage citizens wanting to chase better incomes and lifestyles in Australia. An average of 1000 New Zealanders a week move to Australia - and a record 54,000 moved in the year to July 2012. Most are aged between 20 and 29 and seek work in trade industries.

The National Party pledged at the last election to reverse the numbers but have failed.

For Kiwis moving to Australia there are no hoops to jump through. An automatic Special Category Visa (SCV) is issued electronically to New Zealand passport holders meaning they can live and work here indefinitely. Kiwis are not entitled to Centrelink support until two years after being issued permanent residency.

Labor MP Kelvin Thomson has called on a cap for Kiwis moving to Australia, suggesting a 30,000 or 40,000 limit.

