New Zealand Prime Minister Chris Hipkins has defended a new waitlist system that requires consideration of ethnicity when hospitals are prioritising non-urgent surgery.

The controversial system that considers a patient’s geographic isolation, socioeconomic deprivation levels and ethnicity is currently being rolled out in Auckland.

Opposition parties have slammed the system as racist and promised to ditch it if they win government in October.

Parliament descended into chaos when ACT MP James McDowall asked the Prime Minister about the waitlist algorithm.

"Is it acceptable to him that my five-year-old half-Chinese daughter could be placed lower on a surgical waitlist than someone else with the same clinical need, time spent on the waitlist, location, and deprivation level due to her ethnicity?" he said.

"And if not, why is ethnicity a factor on the surgical waitlist equity adjuster?"

Greens co-leader Marama Davidson interjected before Hipkins could answer, accusing McDowall of stoking racial tensions with the question.

"The nature of these questions are absolutely intended to raise racist opinions amongst the New Zealand public,” she said.

Te Pāti Māori co-leader Debbie Ngarewa-Packer said she the tone of questioning would "create disorder" and accused the Opposition of “low-level race-baiting”.

"Māori are made to feel bad because we're living seven years less... than non-Māori. We're made to feel like we're the problem because there's systemic racism in Aotearoa,” she said.