"Whatever wage deal is struck, and we hope that it's very reasonable in this environment, we will need to absorb but we'll do the right thing by the men and women of New Zealand police."
He said police have been told there will not be any increase in its budget.
Police Minister Anne Tolley said there has been no directive to the Police Commissioner to make savings, just for police to live within their means.
"That's the expectations we all have on our departments that they live within their budget, there isn't extra money and so they have to manage and continue to deliver an increase in front line policing hours."
But Labour's police spokesman Kris Faafoi said he did not see how that can happen.
"I think if we're looking at $360 million over three years, it is going to be a mixture of resourcing and front line staff capability and it's going to hurt the police."