Labour has proposed withholding state support such as tax credits and Working For Families from people who are not enrolled to vote.
The measure could be justified if it lifts New Zealand's low voter turnout, the party says.
Getting the vote out is a priority for Labour and in its submission to the Justice and Electoral Select Committee, written by Labour's general secretary Tim Barnett, the party argues for the idea to be considered.
"The possibility of making enrolment to vote a pre-condition to receipt of various forms of state support (eg Working For Families, tax credits) should be examined," Labour's submission states.
"There are advantages and potential disadvantages to the approach, but it is utilised in other countries and we submit that it is incumbent on us to examine all options to see if they are feasible in our context."
Such pressuring of people to enrol to vote would be highly controversial.
Labour has strongly criticised National for linking state support to obligations, including requiring beneficiaries to take pre-employment drug tests, and potentially cutting benefits if parents do not have children in early childhood education.
Mr Barnett said the submission was from the party, which did not set policy, and wanted the committee to investigate the idea - not necessarily recommend it.
"It's not party policy, it's merely saying, what are the things that could be done? And in Australia that is the system which they formally adopt.
"There is widespread concern, not just Labour, with non-enrolment ... there is pretty compelling evidence that there is a continuing pattern of people not enrolling."
Working For Families pays extra money to families if they have children and earn less than certain amounts.
Asked if withheld state support could include benefits, Mr Barnett said there could be more of an issue with targeting such a defined group.
Despite being legally obliged to enrol, only 91.7 per cent of people had done so at the last election, down from 93.4 per cent in 2011.
An estimated 77.04 per cent of enrolled voters took part in the election, slightly higher than the 74.2 per cent turnout in 2011.
Low voter turnout tends to hurt the left more. In 2011, about 39,000 people were on the electoral roll in Mangere, whose voters favour Labour, compared to 48,000 in National stronghold Epsom.
Mr Barnett said Labour's focus on increasing turnout was not self-serving.
"High turnout benefits the nation ... it means more people are engaged in our democracy and you have to accept that's a good thing."
National wants the committee to consider further restrictions to prevent campaigning around polling places during the advanced voting period, and whether more robust identification is needed.