Heather du Plessis-Allan breached broadcasting standards by referring to the Pacific Islands as "leeches".
The Broadcasting Standards Authority (BSA) found the Newstalk ZB host's comments, which she made live on air in September 2018, "breached the good taste and decency and discrimination and denigration standards".
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"They were inflammatory, devalued the reputation of Pasifika people within New Zealand, which includes New Zealanders of Pacific origin and had the potential to cause widespread harm," the BSA said in its ruling.
Du Plessis-Allan was discussing Prime Minister Jacinda Ardern's visit to Nauru when she said the Pacific Islands "don't matter".
"They are nothing but leeches on us," she said. "The Pacific Islands wants money from us."
She also referred to Nauru as a "hellhole".
Her remarks were met with nationwide disgust, with notable figures such as Sam Neill, Jerome Kaino and Sonny Bill Williams condemning the anti-Pacific sentiment.
In a later broadcast du Plessis-Allan acknowledged the controversy and denied claims she had "casually dehumanised our Pacific peoples".
"Oh my gosh. Did I? Or did I say the Pacific Islands? I don't know, confusing people with islands," she said.
In its ruling, the BSA acknowledge the important role of talkback radio in sparking debate around controversial ideas, but said this "does not mean anything goes or that the host is able to offend without censure".
"On this occasion we found the severity of the comments and their significant potential to cause harm, through distress and denigration, justified the upholding of these complaints and the restriction of the broadcaster's right to freedom of expression. We consider that even in the talkback context these statements went too far."
The BSA also found du Plessis-Allan's "attempted clarification" in her second broadcast didn't mitigate the harm, but in fact "inflamed the distress caused". It ruled she had been "disingenuous" in claiming to have been referring to the actual Islands as leeches rather than the people of those nations.
"Countries are not just plots of land," the BSA said. "They are the land and their people."
The BSA has ordered NZME Radio Ltd to broadcast a statement summarising its decision during one of du Plessis-Allan's Wellington Mornings segments. NZME must also pay $3000 in costs to the Crown.
It noted the public outcry to du Plessis-Allan's comments and said the BSA had a responsibility to "reflect the values and attitudes of New Zealand".
Newshub.
