Statistics New Zealand has decided to leave questions over sex, gender and sexuality out of the 2018 census, leading some activists to label the Government department as "grossly incompetent".
But Mr Shaw says Stats NZ tested adding the question in 2016 and 2017 and the quality of the information "ruled it out on statistical grounds".
"The problem is that people put down different answers and they use different language to describe the same thing," he told The AM Show on Monday.
"There's also a lot of people who, frankly, spoil the result by putting in silly answers.
Mr Shaw says questions on religion and ethnicity went through similar "teething problems" when they were introduced. While Australia asked LGBT questions in 2016, Mr Shaw says the results weren't completely accurate.
"There is no other country that has managed to crack this in terms of getting this statistical information," he says.
The information on the LGBT community will be collected through the New Zealand General Social Survey instead. Read more via News Hub
Is it at worst institutionalised homo/trans/intersex phobia? Or at best gross incompetence on a project with no internal momentum with loss of knowledge as staff changes over?— Aych McArdle (@AychMcArdle) January 11, 2018