A multi-billion dollar prison expansion could put the tax cuts Finance Minister Bill English has hinted at in jeopardy.
On Tuesday morning, Justice Minister Judith Collins announced a prison expansion that will cost roughly $2.5 billion to build and operate over the next six years.
Mr English says the flow-on effect to things like tax cuts and infrastructure is inevitable because of the rise in crime.
"It'll have an impact because it's a very large spend," he says.
"There isn't really much choice about it. The justice system is sentencing more people for longer on the back of growth in violent crime."
Ms Collins says the expansion was needed because the Government has toughened up bail laws, meaning more people are getting locked up.
"People no longer get bail when they're methamphetamine cooks or when they're family violence offenders."
She says that means the prison population has ballooned by 1800 inmates.
"Frankly I think that's a good thing," she says. "Don't think you're going to get a get-out-of-jail-free card because we don't have enough beds."
Labour's Corrections spokesperson Kelvin Davis says the expansion shows that the Government's plans are failing.
"They were meant to reduce crime and now they're just building more prisons," he says.
"They're throwing people into prison, they're going in slightly damaged and coming out totally wrecked."
Ms Collins rejects the expansion in prisoner numbers shows she hasn't addressed recidivism.
"The fact we've got 25 percent fewer coming into our prisons after five years is actually a real plus," she says.
She also blamed the former Government for leaving her without enough beds.
"I had to build container cells, I had to double bunk," says Ms Collins.
Labour leader Andrew Little hopes New Zealand's economic development wouldn't now be built around imprisoning more people.
"Prisons are a mark of failure of law enforcement. When you take police off the beat, you remove the deterrent effect police have in our communities," he says.
"When you get that right, you don't need more prison beds."