Instead of moving into the official residence, a Clareville St property in the upmarket suburb of Kensington, former Speaker Lockwood Smith is staying in leased accommodation in the same suburb at a cost of 4000 British pounds (NZ$7500) a week.
The accommodation is also used for a range of other functions.
Dr Smith took up the post in February after nearly 30 years as an MP.
A spokeswoman for the Ministry of Foreign Affairs and Trade confirmed Dr Smith was not offered the official high commissioner's residence on Clareville St.
Prior to him taking up the role the ministry had decided to sell the property rather than carry out a refurbishment.
The property did not form part of the ministry's long term plan for the post.
Dr Smith would live in the leased premised until a decision was made about the longer term plan, which also included the future of New Zealand House.
It is believed the office building that houses the High Commission and other government agencies needed substantial repairs.
A $2 million upgrade of New Zealand House was planned for last year but had been put on hold following Budget cuts at the ministry.
Labour's foreign affairs spokesman Phil Goff said New Zealand taxpayers should not have to fork out $7500 a week to pay for alternative premises for the High Commissioner while the official residence remains empty.
"Foreign Affairs has just been savagely restructured, with staff being made redundant and allowances slashed to save money.
"There will need to be very good reasons why $390,000 a year is being spent on alternative High Commission accommodation. That sum would cover the annual salaries of more than five Ministry staff."
Mr Goff has called on Foreign Affairs Minister Murray McCully to say why the money is being spent.
"The Clareville St property is only around a decade old. It would be most unusual if it needed major refurbishment at this point.
"If it is able to be occupied, it should be- at least until any decision is made about its replacement or refurbishment," Mr Goff said.
