New Zealand First is boycotting a committee which will decide how the public votes on the national flag, saying the referendum was an expensive exercise which took attention away from greater priorities.

Leader Winston Peters said debating a flag change would "cost us dearly" and take the public's eye off more pressing social and economic challenges.

"A change of flag might need to be considered but now is not the time. Poverty and housing are at crisis level, it's no time for a government to be raising a distraction," Mr Peters said.

His party had rejected Government's invitation to nominate an MP for a cross-party committee.

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Prime Minister John Key said New Zealand First's absence from the committee would not "inhibit the process in any way".

He confirmed the other members of the committee yesterday. They were Act Party leader David Seymour, Green MP Kennedy Graham, Labour MP Trevor Mallard, Maori Party co-leader Marama Fox, National MP Jonathan Young and United Future leader Peter Dunne.

Mr Peters said the process of changing a national emblem needed to follow an "impeccable" process, but National had instead included political parties with very little support in the decision-making process, such as Act and United Future.

The committee will be chaired by deputy Prime Minister Bill English at its first meeting next week, but it will later elect its own chairperson.

The committee's first task will be to nominate New Zealanders for a separate Flag Consideration Panel, which will be in charge of seeking design submissions from the public.

The committee will also have to review draft legislation which will allow two referenda to go ahead.

The first referendum in late 2015 will ask New Zealanders to vote on a range of alternative flags chosen by the Flag Consideration Panel.

A second referendum in April 2016 will be a run-off between the most popular alternative flag and the current national flag.

The process is expected to cost $27 million, not including other potential costs such as altering military uniforms and public buildings which carry the flag.