Non-governmental organisations (NGOs) are being reassured their funding will not be affected if they are publicly critical of government legislation.
Some say they won't put their names to submissions critical of legislation, lest they lose their funding.
When the Auckland Domestic Violence and Disability Working Group made a submission on the Human Rights Amendment Bill to a parliamentary select committee on Tuesday, it said many of the groups it represents did not want to be named because they were worried about their funding.
Labour MP Maryan Street says she was stunned to hear that. "I found that really shocking," she says, "because this is not how we run this country. This is a human rights bill amendment that we are debating at the moment -a Human Rights Act amendment - and if people can't speak up on human rights in New Zealand, what can they speak up on?"
Ms Street says it mirrors the climate of fear in the public service.
But the Minister for the Community and Voluntary Sector, Jo Goodhew, says Labour is just playing politics. She says she she is concerned to hear the claims but is not sure why NGOs would feel that way.
"I think that the grant funding - well, I don't think, I absolutely know that the grant funding is independent of the government and deliberately set up so," Ms Goodhew says.