Bill English said New Zealand taxpayers should not have to foot the bill top give Australians free tertiary education.

Opposition leader Bill English says the Government promised a tougher stance on Australia in retaliation for Kiwis' eroding rights - but instead Aussies will be treated to free tertiary education.

Prime Minister Jacinda Ardern has said she would retaliate by hiking fees for Australian students studying in New Zealand, if moves were made to do the same to New Zealanders living across the ditch.

At this stage, Australian students studying in New Zealand would benefit from the Government's new policy of three free years of tertiary eduction, starting with one year free from January 2018.

DAVID GRAY/GETTY IMAGES Jacinda Ardern and Australian PM Malcolm Turnbull discussed the issue of tertiary fees during their meeting on Sunday.

Ardern said she would withdraw the entitlement if there was a fee-hike across the ditch.

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But English said New Zealand taxpayers should not have to foot the bill top give Australians free tertiary education.

"The whole policy is odd because it means people who don't go to tertiary training have to pay more tax to make it cheaper for people who do, across the board," he told TVNZ's Breakfast.

"The Government created the expectation there was going to be some kind of punishment for Australia, in fact they're getting a free gift of tertiary education here."

English said National didn't think free tertiary education was money well spent, which was likely why the Australian government was planning to hike fees for New Zealanders in Australia.

"You fix the policy, you fix the Australians," he said.

Ardern met with Australian Prime Minister Malcolm Turnbull for the first time on Sunday, where the pair discussed the issue.

In relation to policies that affected New Zealanders studying in Australia, and Ardern's threat to take a tit-for-tat approach with Australians studying in New Zealand, Turnbull said he was committed to the policies that affected New Zealanders and he understood the criticisms.

"Just as we respect New Zealand's right to manage its affairs and determine its university arrangements as it sees fit, I know that New Zealand respects our right to do the same on this side of the ditch," he said.