"From New Zealand's point of view we rely very heavily on the work Australia does on the ground and the places these boats are coming from. So we can try and freeload on that process if we like but I think as a regional partner it makes sense for us not to duplicate those resources, but in the end take some people through their system."

The deal was announced after talks in Queenstown this morning between Key and his Australian counterpart Julia Gillard, who echoed his statement that Australia's "boat people" problem was a "truly regional challenge".

"Australia expends a lot of effort in detecting and disrupting people smuggling ventures and prosecuting people smugglers. This is trans-national crime and we take a very rigorous approach."

Under the deal New Zealand will resettle 150 asylum seekers a year from Australia's refugee processing system.

The new arrangements start from next year and could include refugees processed through offshore centres in Nauru and Papua New Guinea.

Key said New Zealand's annual intake of 750 refugees would not change, but some would now be processed through Australia, rather than the United Nations High Commission on Refugees.

Gillard and Key also confirmed joint legislation giving trans-Tasman regulatory bodies the power to cap mobile roaming and data rates for trans-Tasman travelers.

Gillard said it was a practical demonstration of cooperation under the Closer Economic Relationship agreement between the two countries, which this year celebrates its 30th anniversary.

"A million Australians come to New Zealand every year. They bring with them their mobile phones. Many of them are on holiday so they do the kinds of things that people do on holidays. They take a photo and try and send it back to people at home.

"At the moment that can cause extraordinary charges many of which people wouldn’t be aware of until they get back home and get their next mobile phone bill and get a rude shock."

It was possible to be charged $40 to send a picture, and $8.50 a minute to chat to friends and family back home, Gillard said.

"It isn't just a problem for Australians in New Zealand on holiday. It's obviously a problem for business people too who are routinely travelling between the two countries."

In a joint communique, the two leaders also announced further investigation into measures to pursue student debt on each side of the Tasman, and Australia announced plans to invest more in Smart Gate technology to speed up border checks for travellers.