The Government denies it was placed under pressure by Australia to spend more on the arrival of boat people but it has been suggested the move could be a symbolic nod to strengthen relations.
Efforts to prevent boats of asylum seekers heading to New Zealand received $25 million funding boost in Budget 2019.
The heat has been on New Zealand from the other side of the Tasman for years.
It is understood Australian authorities approached a National Government in about 2013 to do more after an "unsubtle" suggestion that New Zealand was the beneficiary of its hard work in the Timor Sea.
Sources say the Government at the time acknowledged the "massive investment" in the deterrent strategy and considered doing something symbolic.
However, it was rejected by Cabinet because of negative connotations with the Australian Defence Force Operation Sovereign Borders.
People smuggling was put back in the spotlight last year when intelligence leaks from across the ditch claimed there were new boat arrivals of asylum seekers, blaming Prime Minister Jacinda Ardern. This was followed by a public spat between Justice Minister Andrew Little and Australian Home Affairs Minister Peter Dutton, over New Zealand's contributions to the region's security.
It seems Immigration Minister Iain Lees-Galloway and Prime Minister Jacinda Ardern have not been not on the same page about how much of a threat people smuggling poses.
After the Budget announcement on Thursday, Lees-Galloway told reporters the risk of smuggling had increased in recent years but not long after, Ardern told reporters, no greater risk of asylum seeker boats travelling to New Zealand had been identified.
However, on Friday, when Stuff mentioned this to Lees-Galloway, he back-tracked saying the 'chatter' suggesting New Zealand was a destination for smugglers, had been around for a long time.
The Government was not saying there was now a greater risk and had decided it was appropriate to respond now, he said.
The extra funding would be used to boost New Zealand intelligence at home and offshore in the Asia Pacific region. It would be used to invest spy technology to monitor chatter.
The move would also reduce the attractiveness of New Zealand as a 'soft target' for people smuggling ventures.
Less-Galloway met with Australian Home Affairs Minister Peter Dutton at a People Smuggling, Trafficking conference in Bali last year and on another occasion afterwards.
He denied Australia wanted him do more but said there was "a very strong desire" for the regional approach.
"I expressed New Zealand's view and that we had our way of doing things and that we should invest in initiatives like this because we think it's the appropriate way of contributing to that regional effort."
He insisted the Budget funding had nothing to do with the meetings.
"There has been absolutely no pressure from the Australian Government. This has been a decision that New Zealand has made because we are aware that we are a target for people smugglers… and we are aware this dangerous journey puts lives at risk."
The Government had not yet not decided where it would base new intelligence staff but they would work alongside authorities in those counties to intercept smugglers and disrupt potential ventures.
No boat had ever made it to New Zealand because it was a dangerous trip - but there had been chatter suggesting people smugglers were targeting and touting New Zealand as a potential destination, he said.
People smuggling was an increasing concern both internationally and regionally, he said.
"There is potential there that people have gone on the water thinking they are going to New Zealand and ended up some place else or something has gone wrong."
When asked if they ended up in Australia, he said, "possibly, yes".
It was important for New Zealand to remain vigilant and have the appropriate resources to prevent and manage the possibility of a maritime mass arrival, he said.
Meanwhile, the move was criticised by Greens co-leader James Shaw, who objected to the spend.
National's immigration spokesman Michael Woodhouse said the Australians were a huge barrier to maritime arrivals into New Zealand and regardless of what the funding was being spent on, there was no doubt it was being done in close cooperation with the Australians border force.
It was a significant change in policy for the Labour party that once told him there was more chance of little green men from Mars, than boat people coming to New Zealand, he said.
"They are on record saying it [boat people] was dog whistling and a beat up. Now they are spending-up on preventing boats arriving. If there is no change in the chatter, why is there a change in the investment in our border controls and our intelligence gathering?"
He questioned if the minister had new insight into the security risk.
"I think they should be more upfront with the New Zealand people. I don't think the minister should resile from the fact that this may result in greater cooperation with Australia and he should be up front about that going on."