National claims Chris Hipkins reigning over 'Cabinet of Chaos' after latest David Parker comment - but Prime Minister disagrees

The National Party says Chris Hipkins is now reigning over a "Cabinet of Chaos" after senior Labour minister David Parker said his former position as Revenue Minister was "untenable".

Chris Bishop, National's campaign chair, claims that "extraordinary" admission from Parker undermines the Prime Minister's leadership.

"A senior Minister has asked to be relieved of a major portfolio because he fundamentally disagrees with Labour's core tax policies - but yet he remains in Cabinet," Bishop says.

Hipkins rejected the allegation his Cabinet was in chaos and also didn't agree with National's view that Parker had breached Cabinet's collective responsibility provision by expressing his disappointment with the Prime Minister's decision to torch a tax-switch idea. Parker has also denied this.

The Prime Minister on Monday announced that Parker had requested he be moved out of the Revenue role. That came as Hipkins reallocated Kiri Allan's former portfolios following her arrest. Hipkins said it freed up Parker to focus on his Transport Minister role.

"David asked to no longer be Minister of Revenue. I have respected that and he is no longer Minister of Revenue," Hipkins said on Tuesday afternoon.

Asked if Parker would still be an MP after the election, Hipkins responded: "Yes, of course".

National leader Christopher Luxon asked Hipkins in the House whether it was a vote of no confidence in his tax policy that Parker was "so disillusioned he resigned his portfolio instead of just serving until the election".

The Prime Minister responded: "I imagine the Members opposite are feeling somewhat disillusioned by their party's tax policy given they seem unable to come up with a coherent one."

Hipkins said National is yet to reveal how it will exactly pay for its tax policy.

Luxon then asked why Hipkins said Parker wanted to leave the Revenue role to focus on Transport when Parker himself said he believed his position had been "untenable".

Hipkins said he knew from his conversations with Parker that Parker had been enjoying the Transport portfolio.

"David Parker indicated that he wanted to move on from the Revenue portfolio. I was doing a reshuffle and I indicated I was happy to accommodate that."

Hipkins said that from time to time ministers put forward proposals to Cabinet that Cabinet doesn't proceed with.

"Ministers do need to be able to explain that. I don't believe David Parker has done anything other than that."

Parker on Tuesday morning said his position as Revenue Minister had been "untenable" given Hipkins' decision to rule out a wealth or capital gains tax. 

"You know my views on those things, I thought it was untenable for me to continue so I suggested to Chris [Hipkins] that it's in the best interests of him and the party that someone else takes that role," Parker told reporters.

"I've tried to do this in a way that makes it as smooth as possible for Chris Hipkins."

Parker said he was a "loyal member" of Labour and he didn't want to cause "disturbances".

"I just thought it was untenable to continue."

He said his relationship with Hipkins was still very good.

"I am an agent for progressive change. I have been that way all of my political life. I have still got lots of energy as shown by the scraps I have got into in the last couple of weeks on transport."

Parker's role as associate Finance Minister also includes some responsibility for assisting with tax policy. He confirmed on Tuesday afternoon he was keeping the revenue elements of that delegation.

Last week, Parker said he had been "disappointed" by Hipkins' decision to kill off a tax-switch idea he had been working on behind the scenes. 

"I am a team member. Everybody knows my position. I obviously was intimately involved in the design of the proposal. My ministry, Inland Revenue, was one of the two ministries that lead and Grant [Robertson] and I did the design work," said Parker.

"I am disappointed in that decision. As is clear from the papers, I supported it. That is life and I am a loyal member of the Labour Party."

Budget 2023 documents released publicly earlier this month revealed the Government secretly worked on a tax switch that included a tax-free threshold of $10,000 and a 1.5 percent tax on net wealth over a $5 million threshold for individuals.

Hipkins has lost a number of ministers this year, including three from his Cabinet. 

Stuart Nash was removed after leaking confidential Cabinet documents, Michael Wood resigned after not appropriately declaring shares, and Kiri Allan stood down this week after being charged over her involvement in a car crash. Meka Whaitiri, a minister out of Cabinet, also defected to Te Pāti Māori.

Following Wood and Allan's departures, Hipkins decided not to bring new MPs into his ministry, citing the proximity to the election and confidence in his current ministers to cover the load. 

"Between now and the election our singular focus must be on making life better for everyday Kiwis," Hipkins said on Monday. "That is what I have sought to do, and I need everyone to do the same."

But Bishop said the Prime Minister didn't bring anyone new in because he has "so little confidence in his own MPs". 

"He is trying to act as though he has not lost control as Labour lurches from one crisis to the next, but the public can see this for what it is - the last throes of a disintegrating government."

It's ACT's view that Labour is now just a "caretaker Government".

"Kiri Allan is the fifth minister to leave in seven months. Labour has long since run out of talent to replace them and can no longer field a full team of Ministers," it said on Facebook.

"Like a caretaker Government, they're just going through the motions until a new Government is elected."