The Government says the Green Party's shared equity housing policy would lead to more debt without solving New Zealand's housing affordability crisis.
Energy Resources and Housing Minister Phil Heatley said the policy was dangerous for New Zealand in terms of the world economic situation.
"In the end they're either going to have to print money, or borrow it - we're talking about billions - and with the international economy the way it is it's toxic to go into debt.''
He said it was also dangerous for the Greens to entice families who couldn't afford debt into housing.
The scheme targeted exclusively at families with dependent children would not work according to Mr Heatley, who called it a "silver bullet'' scheme.
"We'll be avoiding the silver bullet approach, because there isn't one.
"We have to drive down the cost of housing for everybody and the only way you're going to do that is to build more houses, provide cheaper land and make the consenting process through the Resource Management Act more straight forward for everyone.
"We're taking a much more holistic approach.''
The Green Party today announced it would build about 10,000 houses for up to $300,000 which families would live in and eventually own. The Crown would initially own all the equity in the house because families would not need to pay a deposit.
Families would make weekly payments, similar to rent, to cover the Crown's investment cost - $200 a week on a $300,000 house at a government bond rate of 3.5 per cent. They would eventually make additional weekly payments to buy equity in the property until it is owned outright.
The payments on the equity would be flexible and dictated by the financial circumstances of the family, but the Greens have tagged the payment at around $100 a week.
The National Party's housing policy is focused on maintaining interest rates at low levels, freeing up more land so it's less expensive and encouraging builders to build more houses while speeding up the building consent process through the Resource Management Act.
Labour leader David Shearer has responded with caution to the Green policy. Labour has already committed $1.5 billion to its own affordable housing policy, to build 100,000 cheap homes over 10 years in urban areas with high needs.
Mr Shearer said some of the Green policy was similar to Labour's.
He said rent-to-buy was a good idea, but "it comes down to the economic impact of that and whether we could afford it''.
"There's other areas we would want to take a look at, particularly the economic impact of it. We want to be responsible economic managers and that's a big proviso on whatever we roll out as policy.''