National's Tim van de Molen was stripped of his portfolios, with Luxon claiming his behaviour didn't adhere to the party's expectations.
The MP was censured by the Privileges Committee after he was found to have have threatened Labour MP Shanan Halbert at a Transport Select Committee last month.
NZ Herald deputy political editor Thomas Coughlan says these punishments are rare, with the last politician to be censured being Winston Peters in 2008.
"It's deeply embarrassing to be the only person in 15 years to be censured, so you'd probably have to say that that will heavily impact his political career."
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