Prime Minister Bill English says he will review any decisions made by Associate Social Housing Minister Alfred Ngaro to make sure they were not politically motivated.
Ngaro apologised to the Prime Minister yesterday after threatening to cut funding to Labour candidate Willie Jackson's Manukau Urban Maori Authority.
Ngaro's comments at National's northern regional conference were reported by Newsroom, which said Ngaro appeared to suggest Jackson could lose Government support for his organisation's bid for a second charter school and Whanau Ora contracts should Jackson criticise National on the campaign trail.
English said today that Ngaro "got carried away" and that he did not have the power to carry out such a threat.
It was wrong for him to suggest that National could cut funding to political opponents, he said.
"We don't work like that," English told Newstalk ZB. "We focus on results. Willie Jackson might be standing for Labour, but he's getting results through his partnership school."
Ngaro was appointed to Cabinet last December after Prime Minister Bill English took over from John Key.
Asked by Radio New Zealand whether he would audit Ngaro's decisions as a minister, English said: "I'm sure we would have heard about it, but I'm happy to go back and do that."
He defended Ngaro and the National government, saying that unlike previous governments National did not "use funding levers to manipulate opinion".
Jackson is chief executive of the Manukau Urban Maori Authority, which runs a charter school in Mangere and has a Government contract to deliver the Whanau Ora social programme.
He said today that he would be writing to the Prime Minister to get an assurance about his Government funding.
The authority also had government contracts in the corrections, justice, and broadcasting sectors and employed about 100 people, he said.
"[Ngaro] has effectively threatened those people's livelihoods and our community," Jackson said.
He wanted a guarantee from English that "it wasn't just an off-day for Alfred".
Ngaro has put out a statement yesterday saying his comments were "a bit naive, poorly worded and I absolutely regret what I said".
Ngaro was also reported as saying there was tension within the Salvation Army between the Church and the social and policy arms and claimed Labour was "using its constituents for political fodder" by highlighting the homelessness debate.
In his statement Ngaro said he believed the Government was doing a lot to tackle the challenges in housing.
"I am hugely positive and proud of this work, and this was what I was trying to impart.
"The Government doesn't think it has all the answers to tackling challenges in housing and social support, which is why we work so closely with a range of fantastic community organisations.
"I'll continue to engage with our partners and ensure we are working on real solutions to help New Zealanders who need assistance with housing."