I wanted to know more about the context of the joke. Was it just a play on word, or a political commentary. How much would students in New Zealand in 1934 have known about the nazi'd actions against their own people?
These were not extermination camps. The early concentration camps were prison camps, established to punish and terrorise the regime's political opponents. After Hitler came to power in January 1933, a Dutch communist and recent immigrant to Germany set fire to the Reichstag (parliament) building on February 27 as a protest against the regime. The nazis seized upon this as a pretext to outlaw the communist party and arrest tens of thousands of communists and other left-wing opponents as well as Jews. These were incarcerated in about 100 improvised camps. The best known and one of the only early camps to subsist until the end of the war was Dachau.
Who was sent there and if and when they were released was mainly decided by the Gestapo, the Secret State Police. If you were a model prisoner, renouncing your former views, or if you promised to go into exile, and did not happen to be killed by overwork or guard brutality, you had a good chance of getting out. Other prisoners in these early years were released because of international pressure, or as in the mass Christmas release of 1933. It is fair to say that in the early years, the majority of prisoners were released fairly quickly. In 1936 these smaller early camps would be consolidated under the auspices of the SS into a number of large, uniform camps that we are now familiar with, such as Buchenwald, Bergen-Belsen, Sachsenhausen, etc.
The existence of these camps was not secret and they were known about abroad and reported on in the press, much like we now know about North Korean prison camps or we knew about the GULAG camps in the Soviet Union during the Cold War.