In a speech in Marlborough yesterday, Mr Peters took issue with Labour leader Jacinda Ardern's threat to retaliate against the Australian Government if it took further action against Kiwis.
Ms Ardern answered the question forcefully in Monday's televised leaders debate.
Mr Peters said Labour should have been more careful about its leader gaining a reputation in Australia.
''It's one thing to 'talk back' to the Aussie Foreign Minister [Julie Bishop], who had turned a somewhat acid tongue on her.
''But it is totally something else to throw down the gauntlet to our big cousin on immigration policy.''
Ms Ardern's advisers needed to be more careful, he said. If they were not, it would cost young New Zealanders in Australia plenty.
Ms Ardern telling Australia if it dared raise the cost of university fees for New Zealanders, which had already happened, she would do the same, would fill young Kiwis in Australia with dread.
They were already being maltreated in Australia and those in New Zealand should be trying to fix it, not retaliate, Mr Peters said.
Everyone knew New Zealanders in Australia did not get treated fairly. They were shut out of many services, even when taxpayers.
They were worse off than immigrants to Australia from any other country, mainly because a Labour government signed their rights away in 2001.
By 2001, the Australians were fed up, he said. Tens of thousands of immigrants had flooded in from New Zealand.
''Our easy immigration policy allowed them to use us as a stepping stone to a country that without us they would never have got to - Australia.
''They came here, stayed a couple of years and moved on. Australia was always their goal. We were used.''
That was why, if anyone was going to turn around the mistreatment of young New Zealanders in Australia, they should begin with an unreserved apology and a commitment to fix it, Mr Peters said.
The trick was to get Australians to listen, and it could be done.
