Australians and NZ'ers are still able to live and work in either country.
The changes the Howard Govt introduced meant that NZ citizens relocating to Aus post Feb 26, 2001 will no longer be classed as "permanent residents". They may apply for this after 2 years living here if they wish.
This mainly effects their ability to receive benefits from Govt agencies such as Centrelink and Medicare. For all intensive purposes they are still classed as tax residents and as such are able to work indefinately (all their life if they wish) in Aus without applying for any status.
NZ has not reciprocated this and any Australian relocating to NZ are automatically classed as "Permanent Residents of New Zealand" upon entry.