Prime Minister John Key says the message he got from Labour's weekend conference was that the party wants to make New Zealand less competitive and president Andrew Little is targeting the leadership.
At the Auckland conference Labour announced a comprehensive new policy on foreign investment affecting the sale of farmland to foreigners and overseas purchases of important infrastructure like electricity networks, airports and seaports.
Leader Phil Goff said the result would be a big crackdown on approvals of sales of farmland and strict new rules protecting strategic assets and ensuring foreigners can't end up with a majority share of them.
Mr Goff also hinted at tax changes giving low and middle-income families a better deal while ensuring higher earners paid more of what Labour considered to be their fair share of the tax burden.
Mr Key told TVNZ's Breakfast programme the new policy appeared to be a move to isolate the country from the international stage.
"If you look at the whole economic policy that they seem to be articulating, it's as simple as this: spend more, tax more, take a giant leap backwards, and make New Zealand less competitive and turn your back on the rest of the world."
Mr Key said over 600,000 hectares of land was approved for sale to foreign owners when Labour was in power.
He said a sensible approach needed to be taken to such sales, and that was why the Government moved recently to change the Overseas Investment Act to include different criteria when assessing purchase applications. Ministers were also given more discretion to approve or decline sales.
Mr Little also had plenty to say at the conference and was enthusiastically received by party supporters.
Mr Key admitted he kept track of goings on in opposition parties, but what he read from Mr Little's call for a debate on republicanism was that he had the party's leadership in his sights.
"Andrew Little is preparing himself to take over from Phil Goff," he said.
"No party president needs to get up there and talk about whether New Zealand needs to become a republic or not -- that's not in your mandate of being party president. You are only doing that to get a profile to show the public 'look, I'm the next bloke in after Phil Goff'."