The government's 'waka-jumping' bill puts New Zealand among countries such as Rwanda and Uganda when it comes to democracy, the National Party says.
The legislation is designed to prevent MPs from ditching their party during a parliamentary term and passed its first reading in Parliament yesterday. It is part of the coalition agreement between Labour and New Zealand First.
Under the bill, lawmakers who quit or are expelled from their party would also be ejected from Parliament.
Electorate MPs could seek to win their way back in through a by-election.
National MP Amy Adams told the House the bill would hurt New Zealand's international standing.
"It is a devastating day for democracy," she said.
New Zealand was recently ranked 39th out of 198 countries for electoral freedom by a private pro-market group in Spain.
Ms Adams said the group - Foundation for the Advancement of Liberty - had told National the country was likely to drop down the rankings due to the waka-jumping bill.
"We will join the ranks of countries like the Democratic Republic of the Congo, Angola, Namibia, Rwanda, Uganda, the Philippines and others.
"That's who Labour and New Zealand First want us to emulate."
Ms Adams said similar laws had repeatedly been struck down as unconstitutional in other countries.
Her colleague Nick Smith said Zimbabwe was one of only a few countries with such legislation.
"Zimbabwe is not my model of democracy," he told the House.
"Only in some of the most ramshackle, awful places are such laws promoted."
Dr Smith said the global body, the Inter-Parliamentary Union, had ruled that such laws "create political party dictatorships".
Justice Minister Andrew Little said the bill would uphold the public's confidence in the integrity of Parliament, MPs and the voting system.
"It is not for any single individual MP... to overturn and undermine the verdict of 2.6 million voters."
He said Parliament was not a place where MPs could "indulge personal habits".
"You're here on a point of principle," he said.
The legislation will go before a select committee for further review before returning for a second reading in Parliament.