Transport for NSW says it has so far recruited 17 qualified drivers from across the ditch to work for private operator Keolis Downer on Sydney's northern beaches routes.
The Rail Tram and Bus Industry Union said past overseas recruitment campaigns had left drivers in a situation "akin to modern slavery".
New Zealand drivers who worked short stints had previously realised they could not afford Sydney rents, the union's NSW tram and bus divisional president Peter Grech said.
When the drivers tried to go home, he said the private operator demanded they pay the company back.
"That's akin to modern slavery," Mr Grech said.
The bus driver shortage exceeded 500 after the previous Liberal government privatised bus services.
The Labor government, elected in 2023, said it had reduced the deficit to 179 by March through recruitment campaigns, free training and bonuses.
Transport Minister John Graham said the government had worked overtime to reduce the driver shortage it inherited, but the deficit on the northern beaches - one of Sydney's priciest regions - "remained intractable".
"This is a special situation that has required a special fix," he said.
Kiwi drivers will have their airfares paid and will receive six weeks of rent-free accommodation in the area.
Up to 20 more drivers would be recruited to work in the region, which covers the lower north shore, Manly and Palm Beach.
The state government acknowledged high housing costs priced many workers out of the area and the driver shortage at northern beaches depots was persistent, with its services most susceptible to last-minute cancellations.
Privatisation had driven down the pay and conditions for bus drivers, creating the shortage the government was now scrambling to fix, Mr Grech said.
"The northern beaches is responsible for a third of all bus cancellations in Sydney - that is not a shortage you can fix with a plane ticket from Auckland," he said.
"The NSW government … should be fixing the problem that caused the shortage in the first place, restoring decent pay and conditions and bringing Sydney's buses back to public hands."
Transport for NSW co-ordinator Howard Collins said the recruitment campaign was a practical, targeted initiative in one of the most challenging parts of the network to recruit for.
"By bringing in qualified drivers who can transition quickly into service, we're strengthening reliability for passengers while continuing to build a sustainable local workforce," he said.
The scheme echoes overseas recruitment campaigns in multiple states to plug shortages in frontline services such as policing.
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