ACT says changes to the isolation rules haven't gone far enough and are causing "huge economic devastation".
ACT leader David Seymour told AM on Thursday the rules have been "unworkable from the start" and should be reduced even further.
It comes after COVID-19 Response Minister Chris Hipkins announced on Wednesday the isolation period for COVID positive people and their household contacts would reduce from 10 to seven days from 11:59pm on Friday.
Seymour told AM the Government's current rules are doing nothing to stop the spread of COVID cases but are having major impacts on the economy.
"It seems they need to destroy the economy before we can get sensible rules that might work," Seymour said.
"All that time we haven't stopped the spread, we've had exponential growth in the number of cases, which appears now to be peaking.
"So what we've had is huge economic devastation with an unworkable isolation regime and yet, the spread has carried on growing exponentially anyway."
Seymour said the isolation period should be reduced even further to help take economic pressure off people already struggling.
"What they should have done and what ACT recommended and what they do in Singapore, they say 72 days, two negative tests and you're out because at the moment we say seven days even if you might not have had it or have recovered and you have to keep staying home," he told AM.
"That is really wasteful at a time when there is so much economic pressure on everybody and so many supply chains aren't able to operate.
"You look at supermarkets having to shut and having empty shelves. Just remember, exactly the same things have been happening in hospitals except they have made exceptions just for them while the rest of the economy suffers under the same rules."
New Zealand continues to see near-record cases daily with the Ministry of Health announcing 22,454 COVID cases on Wednesday just short of Tuesday's record of 23,894.
Seymour doesn't believe cases would increase significantly by bringing the isolation period down even further when the outbreak is already widespread.
"It's a question of finding a balance so that the people that have COVID are isolating and people that don't have are not," he said.
"If we had a regime that if people do test negative they are able to get out, back on the field, keep fulfilling their own needs as well as keeping the economy going, we would've had a lot less loss in economic activity but I suspect that we would have had the same result in terms of the growth of cases, which has been exponential anyway.
"I walk around the streets, talk to business owners, they're devastated. I'm almost always the only person in there and unfortunately for them, I'm not a customer, I'm just a politician asking how they are."
