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New zealand offers infinite permanent residency, however if passport is expired and never renewed, is the stay in new Zealand valid ?

Can someone stay in new zealand forever on expired passport on permanent residency?

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My understanding is that residency is granted to the person not the passport (I am a NZ permanent resident). Thus, in theory, what you suggest should be possible.

However, there are many occasions when one needs to prove one's status. E.g. access to healthcare, changing jobs, taking out credit, and so on. The easiest way to do this is to show one's permanent resident visa in one's passport.

I keep my passport current and transfer the visa as much for this reason as the desire to travel abroad.

The visa's validity is indefinite, but it instructs you to transfer it if you renew your passport.

I have no idea who, if anybody, would accept a visa in an expired passport as evidence of residency. In practical terms, then, what you suggest may be difficult, if not impossible.

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