Labour's justice spokesman Andrew Little said the numbers were dropping because of pressure to meet Government targets and paint a picture of less crime.
"Front line police and others in the criminal justice system are telling us police have had pressure put on by senior officers to reduce the number of charges they lay to meet the Government's targets," Justice spokesperson Andrew Little says.
"Police are increasingly using pre-charge warnings as a device to not proceed with charges. At the same time I have heard of people being told to gather evidence themselves before police will consider bringing charges."
But Mrs Tolley said the comments were "unfounded and outrageous".
"Police are operationally independent, and politicians cannot and should not interfere in this process. I'm assured that police prosecute where appropriate. Hardworking frontline police staff deserve credit, rather than uninformed criticism from Labour."
Jane Drumm of the Auckland agency Shine said prosecutions had also dropped because of new prosecution guidelines issued by the Crown Law Office in 2010, and updated in 2013, which "raised the bar" of evidence required for prosecutions.
The new guidelines encouraged prosecutors to make "plea arrangements" with defence lawyers where "releasing the saved costs in court and judicial time, prosecution costs and legal aid resources [could] be better deployed in other areas".
However, Police Acting Assistant Commissioner Dave Trappitt said police had always followed Crown Law's prosecution guidelines so the recent changes "did not impact on the decision-making within the police prosecution service".
"Each charge requires the test for evidential sufficiency to be passed before then applying the public interest test," he said.
"This has not changed."