National says ousted health boss Rob Campbell should also be removed from his role as Environmental Protection Authority (EPA) chairperson.
Party leader Christopher Luxon told Morning Report Campbell's position had become untenable due to breaches of the code of conduct governing public servants and those in charge of Crown agencies.
Campbell, who had been Te Whatu Ora/Health New Zealand chairperson since its establishment last year, had irked the government with several political comments, leading to some questioning his political neutrality within his roles.
His position once again came under attack after he used a LinkedIn platform at the weekend to criticise National's Three Waters policy, saying it was a thin disguise for dog-whistling on co-governance.
Campbell had been a vocal advocate for Māori and a need to address wider systemic health inequalities within the system.
He had argued that the code of conduct governing Crown agency members allowed for free and open expression of views, so long as these did not diminish public confidence in or bring the organisation into disrepute.
However, Health Minister Ayesha Verrall yesterday agreed with his critics and told him to either resign or she would sack him.
Luxon agreed with the decision. He said the thought of sacking him if National won the next general election had not crossed his mind, "until we saw the political comments on the weekend".
"We've got a clear code of conduct about impartiality of our senior leaders and civil servants and that was breached," Luxon said.
"So it's very, very clear that he breached that and he needed to go."
Campbell had personally apologised to Luxon over the phone, which the National leader said he appreciated, but that it changed nothing.
"I thanked him for his call and said that the focus, frankly, should be on making sure we get better health outcomes for New Zealanders, particularly given the state of all their metrics, having gone backwards over the last few years. But the reality is it's an untenable position, given the breaches."
Luxon said the same untenability applied to Campbell's role as chairperson of the Environmental Protection Authority (EPA).
He rejected Campbell's view that the decision to remove him from the health job created a chill factor among those working for Crown agencies and that it had set a dangerous precedent.
Campbell had earlier told Morning Report it could compel boards to only appoint bland 'yes' men and women, with no substantive views on anything other than their immediate jobs, as well as acting as a mechanism to unduly muzzle those in similar roles to his.
Luxon said there was a valid point in having the code and for it to be enforced - in order for that individual to deliver the agenda of the government of the day.
"There's a very good reason for why we want impartiality of chairs of Crown entities - so that they can work with successive governments of any different colour and actually make sure that those agendas are being implemented well.
"That's why the code of conduct exists like it is. We have some very good people in similar roles and I'm sure they have their private opinions, but they keep them to themselves, because they hold that position publicly...
"My rule of thumb has always been that you hold the position 24/7."
He denied Campbell's criticism that National's position on Three Waters, which has a co-governance component amounted to dog whistling.
Luxon said the real issue was about how to make appropriate investments in water infrastructure, and ensure high quality water standards for future generations.
National wanted to put ownership of water back into local council hands and Luxon denied councils didn't have the financial capacity to fund much-needed infrastructure investment.
Councils hadn't put money aside to account for the depreciation of water infrastructure assets because long-term infrastructure investments had been funded out of short-term cash reserves, he said.
"What we're wanting to do is be able to give councils access to long-term debt funding, that actually matches up with the life of the asset."