To create a subdomain, log into your control panel and click on the 'add subdomains' button. Once the subdomain has been created there will be a new folder in your public_html folder associated with this new subdomain. Your subdomain will load its index page from that folder.
To create an FTP account for your subdomain, create an FTP account with the same login name as the name of the subdomain:
subdomain: subdomain.yourdomain.co.nz
ftp: subdomain
The FTP settings for the subdomain would then be:
server:
ftp.yourdomain.co.nzlogin:subdomain@yourdomain.co.nz
password:your password