ACT is opposing the Government's "deeply divisive" plan to abolish the veto of Māori wards in local councils - a policy described by Labour as "racist".
Local Government Minister Nanaia Mahuta announced on Monday the Government will introduce legislation that puts in place measures that uphold council decisions to establish Māori wards or electoral subdivisions.
Under the current Local Electoral Act, a decision to establish a Māori ward can be overturned by a local poll with 5 percent support from ratepayers. The policy does not apply to general wards, which is why it has been labelled unfair.
The Government plans to make immediate changes that establish transitional measures for the 2022 local elections. The second stage will develop a permanent mechanism for local authorities to consider the establishment of Māori wards.
"The current system has a different set of rules for establishing Māori and general wards and that uneven playing field needs to change," Mahuta said. "The process of establishing a ward should be the same for both Māori and general wards."
She described the ability to veto Māori wards in local councils as racist.
Green Party Māori development spokesperson Dr Elizabeth Kerekere welcomed the Government's position to support the representation of Māori in councils, describing it as a "win".
But ACT leader David Seymour says New Zealand's electoral system should focus on common interests and treat voters equally. He says Labour's plan for Māori wards would take New Zealand down a "divisive" path.
Māori wards are areas where those on the Māori electoral roll vote for candidates standing in that area. It's a bit like the seven Māori electorates which Māori can choose to enrol in for the general election.
"ACT believes in the inherent dignity of each and every individual," Seymour said. "Making laws that give people different rights based on who their great grandparents were is fundamentally divisive."
Seymour says ACT does not believe Māori wards are necessary to achieve representation.
"We joke about this Government being undemocratic, but I never thought I'd see Labour taking away the right to vote just because they don't like people's choices."
It comes amid tension surrounding Tauranga councillors voting to introduce a Māori ward for the city in August last year, but now a petition to force a referendum against it has gained enough support to put the decision in doubt.
A public meeting last week organised by Hobson's Pledge became heated, as spokesperson Don Brash - the former National and ACT leader - spoke out against Māori wards, calling them separatist, unnecessary and outdated.
Since the petition against the Māori wards in Tauranga has reached enough support, it could spark a referendum which will cost the city more than $200,000.
With the removal of the veto, councils will no longer have a barrier to introducing Māori wards, which could change the course for the 24 councils who have attempted it. So far, only two councils have been successful.
Where polls have been triggered by electors, all have resulted in the council's decision being overturned. Only one council-initiated poll - at Wairoa District Council in 2016 - has resulted in Māori wards being established.
Nine councils have decided to establish Māori wards for the 2022 local elections, joining three councils who established these at earlier elections. The Government will support these councils' decisions "to improve Māori representation".
Following Mahuta's announcement, Dr Brash described it as an "outrageous decision" that will "cost the Government votes at the next election", because "most Kiwis want nothing to do with race-based political structures".
But Mahuta said the original policy was fundamentally unfair and hopes that New Zealanders will understand the Government's justification for stepping in.
"This is about a fair system. Let's be really clear: in our legislation, you cannot have a citizens' initiated poll to overturn the creation of general wards or constituencies but you can for Māori wards and constituencies. On that front alone, it's very discriminatory," Mahuta told reporters.
"I would hope that the conversation that has been had and will continue to be had through the creation of Māori wards means people will build better understandings of what it's going to take to work together."
What does National think?
National leader Judith Collins has been quiet on the issue of Māori wards because her caucus is yet to discuss it and form a consensus.
She announced on Monday that for the first time since 2002, National will stand candidates in the Māori electorates in the general election in 2023.
Mahuta said National has a "big challenge" ahead of them.
"They have neglected the Māori seats for a very long time and it's very clear that they are looking for ways to try and build their profile."