Claws out in NZ over Auckland airport rail

Tensions with New Zealand's coalition government are boiling over after minority partner NZ First scuttled Prime Minister Jacinda Ardern's flagship infrastructure project.

A multi-billion dollar plan to build a light rail link between Auckland's airport and CBD has been shelved after the party of Ms Ardern's deputy, Winston Peters, intervened.

The project was the first policy announced by Ms Ardern as Labour leader in 2017 prior to her ascension to prime minister.

While the Greens and Labour want the rail link, NZ First did not.

"Every programme has got to stack up, be fiscally sound and it's got to work," Mr Peters said on Wednesday, having earlier detailed his opposition to news outlet Stuff,

"We've always been for heavy rail in this country.

"Light rail is a plan that the costs have blown out massively ... it is not going to happen in the immediate term."

Greens leader James Shaw called that a "slap in the face to Aucklanders".

"I'm always disappointed in New Zealand First," he said.

New Zealand's parliamentary numbers are delicately balanced, with Ms Ardern's government requiring the support of both their right-wing and left-wing partners to pass legislation.

While NZ First is around the cabinet table with major posts and a coalition agreement, the Greens hold minor ministries and operate with a confidence and supply deal.

As such, NZ First has been blamed for blocking a number of proposals, including a capital gains tax, raised emission vehicle standards, an ocean sanctuary, rent relief during the pandemic, and legal recognition for transsexuals.

Mr Shaw, the climate change minister, suggested the Greens would think twice about dealing with them again.

"I have faith in the Green Party's confidence and supply agreement with Labour. I don't have faith that New Zealand First are able to uphold their own coalition agreement," he said.

"Any party should be very mindful about that going into government in the next term."

Justice Minister Andrew Little, who preceded Ms Ardern as Labour leader, couldn't resist a small swipe at NZ First despite saying he would deal with them again.

"This has been a great government, a stable government that's achieved some great things," he said.

"I'd have no reluctance to do it again. I might change the ground rules."

The light rail proposal will now go to the people at the election on September 19.

Labour and the Greens will campaign for it, while NZ First and the opposition National party will campaign against it.

Labour is currently streets ahead of National in the polls, while the Greens are likely to return to parliament and NZ First are on track to lose representation.

Labour Transport Minister Phil Twyford said he had two "credible and deliverable" proposals to fund and build the link but "government parties were unable to reach agreement on a preferred proposal".

Auckland Mayor Phil Goff, a former Labour leader, lashed out at the outcome.

"I am disappointed ... as I am sure many Aucklanders are too," he said.

Auckland is New Zealand's biggest city and a notoriously congested metropolis of 1.7 million residents.