"He has held the position of the monarch of New Zealand's consort for six decades, which is a phenomenal length of time to be in any position.
"And he has shown his commitment to New Zealand on many occasions. He is well connected with charitable organisations and social groups."
The Order of New Zealand is New Zealand's highest honour, limited to 20 living persons at any time.
But additional members can be appointed in commemoration of important royal, state or national occasions - such as the Queen's Diamond Jubilee this year.
The citation for the Duke of Edinburgh lists his roles such as Marshal of the Royal New Zealand Air Force and patron of charities and organisations here.
Special mention is made of his Duke of Edinburgh's Hillary Awards, which "continue to motivate and encourage young New Zealanders".
But Mr Holden said the honour was a "slap in the face" for New Zealanders working to better their communities.
"The people who are doing the work, getting their hands dirty, turning up to the soup kitchens and running the sausage sizzles ... they are the New Zealanders."
Mr Holden said honouring someone known for public gaffes, including racist remarks, sent the wrong message.
But Mr Palmer said his organisation had called for the honour to be given, and was pleased the Government had done so.
"I think most people will look at it and say, 'The man is in his 90s, and has devoted 60 years of his life to service around the Commonwealth'."
THE PRINCE OF GAFFES
A selection of Prince Philip's most infamous soundbites:
1. "I would be arrested if I unzipped that dress."
To a nearby police officer last month after noticing a council worker in a red dress with a zipper running down the front.
2. "Deaf? If you're near there, no wonder you are deaf."
To a group of deaf children standing near a Caribbean steel drum band in 2000.
3. "If you stay here much longer, you will go home with slitty eyes."
To 21-year-old British student Simon Kerby during a visit to China in 1986.
4. "You managed not to get eaten then?"
To a British student who had trekked in Papua New Guinea, during an official visit in 1998.
5. "Do you still throw spears at each other?"
Prince Philip shocks Aboriginal leader William Brin at the Aboriginal Cultural Park in Queensland, 2002.
- additional reporting by Jamie Morton