Smith said the ads' claims were "misleading" and a constant refrain from the Act Party and associated people.
"The Act Party are a bit frustrated that the Government has reached an agreement with the Maori Party. I find it ironic that this was not one of the issues they highlighted when we first talked to them about the bill - only after we decided to go with the Maori Party."
Smith said the process required a council to hold talks with local iwi on a possible agreement over the participation iwi would have in planning and consenting processes.
He said consent applicants were often confused over which iwi to consult in some areas and whether consultation was needed. The agreements would specify which iwi had mana whenua status over geographic areas and the issues they were concerned with. However, no council would be forced to enter into an agreement if they could not agree with an iwi.
"That's quite deliberate because we only want councils going into arrangements that are practical and workable, which is the overall objective of the reform.
The claims in the ad that iwi chiefs are going to being sitting around the council table is just a nonsense. That would be unlawful.
But the experience is that where you get those agreements at the front end, is councils and applicants find it much easier to be able to meet their consultation obligations."
He said iwi would be involved in the development of council plans.
"The Government's view is that iwi has a perspective that needs to be heard in the management of our natural resources, like water, air and the protection of native species."
United Future Peter Dunne and Act leader David Seymour recently held a joint press conference in a last ditch attempt to get National to use them to pass the reforms instead - but hours later the Maori Party announced it had agreed to support it.
Smith said the joint offer of support from Dunne and Seymour was too little, too late.
"It was far too late in the process. We tried for nine months in 2014/15 to get Act and United Future. Their last minute attempt to do a deal would have meant the Government not acting in good faith to the Maori Party, which offered support and honoured that through the first, second and now the third readings."
One of the further concessions the Maori Party has gained was a carve out in the provisions allowing ministers to overrule council decisions on genetic modification. The Maori Party amendment will mean ministers cannot overrule council decisions on GE crops, although GE animals will not be exempt.
The reforms are opposed by NZ First, Act, United Future and the Greens. Labour also opposes the reforms, saying they gave ministers too much power over local elected bodies.