Recently a government report summarized what has occurred since:
The PRA has been in force for five years. During that time, the sex industry has not increased in size, and many of the social evils predicted by some who opposed the decriminalisation of the sex industry have not been experienced. On the whole, the PRA has been effective in achieving its purpose, and the Committee is confident that the vast majority of people involved in the sex industry are better off under the PRA than they were previously.
As JD at Disloyal Opposition points out:
In contrast with conditions where prostitution is illegal, only 4.3% of female sex workers (and half as many male prostitutes) in New Zealand have been coerced into the business. Employment conditions have dramatically improved now that sex workers have access to legal redress for mistreatment by employers and customers. They can also go to work on their own, without need of the "protection" of an established pimp.
Of course this requires a society willing to acknowledge that an individual has the right to do whatever he or she wants with his or her own body, including selling pleasure from it, and not a society so driven by church and state enforced morality that we can't even consider the idea.
Should prostitutes, if the business is legal, have the right to decide which customers they will or won't take, regardless of the reason? Libertarians would say, "Yes."