The National-led government paid tens of thousands of dollars to former National Party MPs, a former candidate and a financial donor to produce its 'loopy rules' report.
The government taskforce was established in 2014 to rid New Zealand of rules that are unnecessarily bureaucratic and which stop people from getting things done.
The Rules Reduction Taskforce toured the country to hear New Zealanders' tales of ruled that were out of date, inconsistent, petty, inefficient, pointless or onerous.
Last year the taskforce released its report The Loopy Rules Report: New Zealanders Tell Their Stories.
The report cost $750,000 and one of its key findings was that many of the rules complained about did not actually exist.
Half the taskforce members were appointed by the Local Government Minister at the time, Paula Bennett, and had clear ties to the National Party.
On the taskforce were former National MPs Tau Henare and John Carter, former party candidate Mark Thomas and Ian Tulloch who helped fund a National MP's campaign.
Documents released to RNZ under the Official Information Act show they were each paid $500 a day to take part.
In total they were paid more than $25,000 in fees.
Labour MP Phil Twyford was disgusted with the situation.
"It's an insult to the taxpayer that the National government should undertake a blatantly political exercise like this, blow $750,000 of taxpayers money and essentially provide a make-work scheme for National Party has-beens and apparatchiks."
Green Party MP Julie-Anne Genter said it was a clear case of cronyism.
"We're getting to that point where the National government is losing all perspective or sense of touch with reality - when they think it's okay to pay their former MPs or candidates and donors to undertake what's ostensibly some sort of taskforce work, it's really just an exercise in PR and spin."
But former National Party candidate Mark Thomas said the taskforce members were picked for their skills - not their party links.
"Having worked with everyone on the taskforce I could tell you that all of them had specific expertise, either local government expertise or in building and construction industry.
So from my point of view, having worked for several months on that taskforce, I think it was put together by people who were qualified and capable, and able to contribute to the task the minister had given us."
Mr Thomas was paid more than $10,000.
National Party MP Jacqui Dean chaired the taskforce but was not paid a fee.
One loopy rule - that lolly scrambles were illegal - was found to be a myth.
But a rule requiring hairdressers be registered and inspected annually by councils - because they were once a source of infection - was found to be loopy, given there's no such requirement for similar industries.
Local Government Minister Sam Lotu-Iiga said people selected for the taskforce were chosen for their strong understanding of the local government and business sectors.
In July, Mr Lotu-Iiga announced the Government would adopt 72 of the loopy rules taskforce's 75 recommendations.
Those recommendations included relaxing building laws and letting builders sign off on more of their own work, getting WorkSafe to do more myth busting, and most importantly stop making loopy rules.