Dame Tariana Turia has accused the Government of spending more money on locking people up than on combating poverty.
The former Maori Party co-leader spoke out yesterday following news that the Government planned to spend $1 billion to provide extra capacity for New Zealand's burgeoning prison population.
And it is estimated that a further $1.5b might be needed to look after the extra prison buildings and rising numbers inside them.
Corrections Minister Judith Collins said the decision had been made to show it was "deadly serious about cracking down on methamphetamine and violent crime".
But Dame Tariana said the Government had lost its focus on social investment.
"Our children are being punished with a lifelong sentence of impoverishment, with a third of New Zealand children (300,000) living below the poverty line," she said.
"We have become immune to the hazardous markers of poverty and their devastating effects: living in cold, damp, over-crowded houses; food poverty or uncertainty; poor health; unstable employment."
Referring to the spending on prisons, Dame Tariana said: "It is seemingly easy to dig deep into Crown pockets for extra spending of $2.5b over five years to buy a new building at Mt Eden; provide for double-bunking at Ngawha, establish a possible new 1500 beds in the Waikeria site.
"The saddest thing for me was to hear the statement from the Minister of Finance that confirmed spending on prison capacity limits spending on other options.
"Instead of taking a preventive approach to minimise the people who enter and re-enter prisons, government is boosting spending on prisons and Labour is building up the numbers of police by another 1000 recruits".
She said New Zealand should look to the achievements of Scandinavian countries which had "far lower incarceration and crime rates, leading to the closure of prisons".
"To them, prison is about rehabilitation. The site of last resort rather than a breeding ground for future criminals.
"It's all wrong - we blame the poor for being poor; we under deliver on mental health support and traumatic brain injuries; we label parents as not looking after their children, we joke that it's easier to count the number of stoats and possums than measure the number of children in poverty.
"And yet we choose to invest in more jails; to introduce tougher bail laws; to hand out harsher sentences; rather than to take immediate action for children who are forced to live in cars and garages; or to remedy the exceptional circumstances families find themselves in.
"This latest announcement of the billion-dollar spend in incarceration must force us all to re-examine what are the fundamental values that New Zealand upholds."