Labour's corrections spokeswoman, Jacinda Ardern, said "you would be hard pressed" to find a party that did not back the new policy, and most prisoners were eager to be occupied.
Greens justice spokesman David Clendon said his party supported working prisons in principle, as long as the cheaper labour did not undercut the private sector outside.
Inmates can earn a small income - about 60c an hour - inside jails, or market rates if they are part of the work-to-release scheme, in which inmates leave prison during the day to work for private employers.
The second part of National's corrections policy is a $6 million investment in drug addiction treatment for former prisoners.
The investment is designed to allow continuity of treatment when offenders move from prison into the community, and is expected to pay for around 1000 ex-inmates a year.
Corrections expert Kim Workman, from the lobby group Rethinking Crime and Punishment, said this was a much-needed initiative, but there was still a gap for treatment before people were convicted. Addicts now faced two- or three-month waiting lists, "enough time for someone to go seriously off the rails".
Mr Workman said addicts should not have to be sent to prison before they could get help, and the Ministry of Health needed to reverse funding cuts for addiction services.
The new policies extend National's increasing focus on rehabilitation.
Two of the party's potential coalition partners, Act and the Conservatives, want the Government to take a tougher approach to criminals. Prime Minister John Key said yesterday that this would be considered, but he felt National was on the right path.