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The party is a possible coalition partner with the National Party after this year's general election.
Mr Craig told RadioLive today he wanted the issue of repealing the anti-smacking law to be "on the table'' for future negotiations with National.
Asked if he would start smacking his own children if the law was reversed, Mr Craig said: "I occasionally do it right now''.
"Like two-thirds of New Zealand parents I don't go putting the good raising of a child behind a silly law.
"So the silly law is not working for me, it's not working for two-thirds of other New Zealand parents, because they are recognising their job to raise their children as more important.''
He agreed he was breaking the law in smacking his children and said he believed most other parents were doing the same.
"Because they, like me, know that this law is a stupid law, it has not done anything to curb the abuse of children in this country and in fact abuse statistics have continued to rise.''
He pointed to the 2009 referendum on the issue in which 87.4 per cent of the votes answered no to the question "Should a smack as part of good parental correction be a criminal offence in New Zealand?''
Voter turnout in the referendum was 56.1 per cent.
Mr Craig said the law was not working because child abuse rates had risen since 2008.
Mr Craig told APNZ he did not expect any backlash from his admission of smacking his own children.
Polling last year covered the issue of whether the law banning smacking should be changed and two thirds of respondents agreed, he said.
However, he conceded that did not necessarily mean the same numbers of parents were ignoring the law and smacking their children.
In lightly smacking his children, Mr Craig said he was being "consistent'' with the intention of the law.
"I think a lot of parents will see themselves in the same position.''
The law as it stood was too "ambiguous'' because it said police would not prosecute a parent for a smack unless it was in the public interest, Mr Craig said.
''(Prime Minister) John Key said a light smack's okay - well actually legally he's not right.
The law is a light smack's okay if the police deem it's not in the public interest to prosecute.''
He said the physical discipline of his own children was technically against the law if police saw it in the public interest to prosecute.
"And how would I know what they think?''
He said mostly his discipline consisted of "a flick of a finger on the back of a knuckle''.
"It's hurts for a moment,'' he said.
But the vast majority of discipline he used was not physical, he said.