David Seymour says benefits should be frozen for people who haven't filled out their Census.
The Census deadline was March 7 but about 14 percent of people still hadn't returned their forms. Statistics NZ, the Government's data agency, had since resorted to handing out rugby league tickets to motivate people.
It comes after a poor turnout to the previous Census, the results of which determine "what you, your family and your community need", in 2018.
"If someone can't be bothered to spend 10 minutes online completing the Census, they shouldn't be eligible to receive Government benefits. I predict this move will get Census completion rates near 100 percent overnight," Seymour said in a statement on Saturday.
"Kiwis who've done the right thing and completed the Census are now watching people who couldn't be bothered get free Warriors tickets."
Seymour, the ACT Party leader, said Census "decides more about who gets what than any election" and New Zealanders "who rely on the Government for income should have more interest in ensuring it is filled out than anyone".
National, ACT's fellow Opposition party, has also argued Statistics Minister Deborah Russell needed "to front up over the failure under her watch".
"Deborah Russell previously staked her career on the 2023 Census reaching its 90 percent target," said Seymour. "She should take ACT's advice if she wants to meet the target."
Earlier this week, Stats NZ said nearly 4.5 million people had returned their Census forms.
Seymour said payment freezes for those who hadn't filled out their forms should also apply to Working for Families tax credits.
"I have no doubt the usual suspects will be outraged by this suggestion. It shows how far New Zealand's values have slipped."
He said once people had filled out their forms, their benefit payments could be back paid.
