New Zealand First MPs are defending moves to tie new candidates to a contract that would fine them if they were to stay on as an MP after leaving the party caucus.
The party has changed its constitution so new MPs would be liable to pay $300,000 if they quit or were expelled from caucus but did not leave Parliament.
New Zealand First MP Denis O'Rourke said it was his idea to put in the financial clause, as it cost a party a lot of money to lose a caucus member, and the $300,000 was not a fine, but damages for breach of contract.
Mr O'Rourke said if a New Zealand First candidate did not agree to the rule they probably would not be selected to stand for the party. He said some legal experts have wrongly assumed the clause would not stand up in court.
New Zealand First leader Winston Peters said a party should not lose out if a member leaves caucus.
He questioned why a party that spends all its money to get a member of Parliament in, should then be punished when that member takes a walk. The party's porportionality is then lost, the vote is down and it has to make all the costs of staff and an office, he said.
Party whip Barbara Stewart said waka-jumping, especially for a list MP, is not ethical. Those members come into Parliament off the back of party and if they are not going to be with the party they should leave.
MP Asenati Lole-Taylor said all the party's MPs would be subject to the same rules and it was fairer that the party was up-front about it.
Prime Minister John Key called the move ridiculous and said most members would not have $300,000 sitting around to pay the fine.
Mr Key said when members are expelled it is often over a dispute, so it would be hard to arbitrate.
He said the New Zealand First leader must be worried about who could potentially come in on the party's list.
National MP Tau Henare, who quit New Zealand First in the late 1990s, told Radio New Zealand's Morning Report programme the plan was a form of fund raising and unrealistic.
Mr Henare said that so many people have quit New Zealand First the party would make millions if they all had to pay up.