A New Zealand politician has labelled Senator Malcolm Roberts's call for sanctions against New Zealanders in Australia "absolutely nuts", passing it off as using "the politics of hate and division for self-promotion".

Opposition MP Kelvin Davis, who has used his position as Labour's Corrections spokesman to fight against the Turnbull government's changes to immigration policy, which sees long-term visa holders deported if they are sentenced to one or more years in prison, said Senator Roberts's call to put sanctions on New Zealanders living in Australia was "just crazy".

In a statement released on Wednesday, Senator Roberts lashed out against New Zealand's decision to co-sponsor a United Nations Security Council resolution censuring Israel and calling for an immediate end to any settlement activities in disputed zones, saying it was a betrayal of a close ANZAC ally and akin to "stabbing [Israel] in the front".

"At the very least, we should look at further cutting benefits for New Zealanders living in Australia," he said.