The Minister responsible for Multicultural Affairs Zed Seselja says he cannot understand why New Zealand migrants feel resentful towards their adopted country and report higher levels of discrimination than other groups.

Key points: New Zealanders and South Sudanese migrants felt discrimination most, survey of more than 10,000 people found

New Zealanders and South Sudanese migrants felt discrimination most, survey of more than 10,000 people found Muslim women twice more likely to be discriminated against

Muslim women twice more likely to be discriminated against Migrants feel less optimistic the longer they stay in Australia

The Australians Today report, which highlights the experiences of more than 10,000 people, shows most migrants are very satisfied with their lives in Australia, but New Zealanders and the South Sudanese stand out as the two groups who experience the most discrimination.

Senator Seselja said he was surprised by the findings, but suspected New Zealanders believed there was a "systemic bias" against them because those who arrived on special category visas cannot receive welfare and other benefits.

"But New Zealanders also have a greater ability to come here and work, just with their New Zealand passport, so there are opportunities they get in Australia that people in other countries don't," he said.

"So I can't quite understand why they're feeling this discrimination."

Migrants from South Sudan bear the brunt of discrimination, with the report's author Professor Andrew Markus describing the level of colour prejudice towards them as "off the scale".

But unlike their Kiwi counterparts, most South Sudanese migrants (76 per cent) say they are satisfied with their lives in Australia.

Senator Seselja said he firmly believed Australia was not a racist nation but acknowledged there were racist elements that needed to be called out.

"What I will do is engage with the South Sudanese community to try and get an understanding of some of what they're experiencing and how we can improve their experience here in Australia," he said.

"Clearly some of our South Sudanese residents will stand out in some parts in the community, that's just a fact.

"The right response is to welcome them as most Australians have, the wrong response is to engage in discrimination or outright racism which is just wrong."

Both New Zealand and South Sudanese migrants also reported low levels of trust, with Kiwis holding a very little trust in political parties (10 per cent) and the South Sudanese reporting the lowest level of trust in the police (24 per cent) out of any other group.

Tensions recently flared on the streets of Melbourne when about 100 men of African, Islander and Caucasian appearance converged on the Moomba Festival and clashed with police.

Muslim women more likely to face discrimination than man

The survey, conducted by the Scanlon Foundation and Monash University, found a high level of negativity towards Muslims, with women twice as likely to face discrimination as men.

Australia's Muslim community has been misunderstood, the survey found ( ABC News: Margaret Burin )

Professor Markus said one of the most disturbing stories involved a Melbourne tram driver who refused to allow a heavily pregnant woman on board when he looked up and noticed she was wearing Muslim garb.

"The tram stops and she leaves the kerb to get onto the tram but the driver sees her and takes off," he said.

"And as she looks up she sees the other passengers laughing.

"These are the sort of disturbing things that are going on in Australia."

He said the woman was on her way to hospital for a check up but was so upset by the experience, she went home instead.

Lack of understanding about diversity of Muslim community

Many of the Muslim respondents complained of being stereotyped and misrepresented by the media, who had little interest in actually talking to the community.

"The reality of Muslim Australians is that Muslims in Australia are as diverse as the whole Australian population and often I find there's a lack of understanding that most of the Muslims in Australia are born in this country," Professor Markus said.

Despite the survey results, Professor Markus said Australia is still one of the most successful countries when it comes to integrating migrants but he said there will always be rejection and intolerance.

He said immigration is a difficult process and the survey found migrants are incredibly optimistic about their prospects when they first arrive in Australia but become less so as time passes.

"In the first generation it's a struggle and in the first generation many find they cannot achieve their dreams, so it's more a question of the second and third generation and the way they make their way in Australian society," he said.

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