Finance Minister Bill English's accusation that prison union members were constraining capacity was an unjustified attack, Labour says.
Mr English yesterday talked about prisons being among the first public-private partnerships likely to get under way.
Asked whether the private sector should be limited to building rather than running prisons, Mr English hit out at members of the Corrections Association of New Zealand (Canz).
The union is taking the Corrections Department to the Employment Court arguing that the commissioning of double bunked prison cells breaches guards' collective agreement.
The prison muster is over 8000.
"I think the public would be more concerned about the current arrangements where effectively the Corrections union decides how many prisoners we are allowed to lock up after they've been sentenced," he said.
Mr English also said the Government would do what was most cost effective.
"So over the next 12 months or so we'll get to see whether the publicly funded and run prisons can give us better management of the prisons and less escapes, if the other arrangements look like they will give us a worse service then we won't go with them."
Labour law and order spokesman Clayton Cosgrove described Mr English's comments as an attack on prison officers who were trying to ensure a safe work environment.
"Because Canz is proving to be an obstacle to the Government's plan to proceed quickly with more double-bunking, Mr English launches into them," Mr Cosgrove said.
"Implicit in Mr English's put-down of Canz is a threat that prison officers won't get away with being so `uncooperative' if the Government kicks off its first PPP with a private prison."
A spokesman said Mr English would not be commenting on Mr Cosgrove's remarks.
