"'Our new arrangements recognise the right of each country to determine access to social security benefits not covered by the agreement, and to set any related residence and citizenship rules according to their respective national legislative and policy frameworks."
Comment: Not if the resulting legislation violates international human rights law.
"In line with that principle, a number of supplementary changes are being announced by Australia under its national policies, relating to the conditions under which New Zealanders moving to Australia after today will in addition qualify for access to other Australian social security benefits not covered by the bilateral agreement and for Australian citizenship. Australia will preserve the social security entitlements of those currently benefiting under the existing bilateral agreement, and transitional measures will, where appropriate, cover the period from today to the entry into force of the new agreement."
"New Zealand does not propose any change to migration/residency and citizenship access for Australians in New Zealand at this time."
Comment: Hmmm, I wonder why? Perhaps New Zealand actually honours the agreements they sign...
"The changes to arrangements for accessing Australian benefits which Australia is announcing today are intended to address social security costs..."
Comment: This makes it very clear. When the Australian Government says that these changes are "as a result of new bilateral arrangements" what they really mean is that they are as a result of New Zealands' unwillingness to be pressured into coughing up even more money in compensation - and nothing whatsoever to do with the actual bilateral agreement itself.
I can only guess that Australia demanded that all social security payments should be renegotiated under the bilateral agreement. As no agreement on this was obviously reached Australia decided to implement what it wanted anyway, and pulled the plug on entitlements to citizenship etc. Why New Zealand simply sat back and did nothing seems amazing - unless there were threats to revoke 'trans-Tasman travel freedoms' perchance? (but this is all purely conjecture)