Ms Collins is keen for private companies to again compete with the Corrections Department to run new prisons, including a 900 to 1200-bed jail due to open by 2012.
Maori Party co-leader Tariana Turia said Maori would see great opportunities and she would not be surprised to see some groups or iwi putting in tenders.
"Many Maori have considerable experience in prison work, not only in this country but also in Australia," she said.
"And in the past some iwi have expressed an interest in running prisons."
Mrs Turia said while New Zealand had "home grown problems" it seemed to be importing staff and ideas from other parts of the world to run prisons.
"It just isn't working," she said.
"As in areas like health and social services -- where Maori are successfully contracting to deliver services -- it might also be time for a fresh look at prisons and I would encourage that."
Meanwhile, Labour's response was entirely predictable:
Labour's law and order spokesman Clayton Cosgrove said running prisons ws core government business and National's move was based on "pure ideology".
"Pure ideology"? Pots and kettles Mr Cosgrove, pots and kettles.