Selena Uibo, who is also shadow treasurer, gave her budget reply speech on Wednesday after Treasurer Bill Yan outlined a record spend of $1.5 billion on law and order.
Ms Uibo said the Country Liberal Party government was putting investment in prisons well above investment in jobs and economic growth, social cohesion and community development.
About $500 million will go to corrective services, with Mr Yan saying the government was "unapologetic about shifting the focus from offender rights to the victims' rights to feel safe".
He noted the government had provided more than 500 extra prison beds since coming to power in 2024.
Tougher new bail laws introduced two weeks ago mean even more beds will be needed.
Ms Uibo said being on bail or serving a sentence should never be a pathway to further offending.
But that happened when governments failed to invest in intervention, rehabilitation and support programs that broke the cycle of crime and gave people the chance to change course, she said.
"This is how we deliver long-term reductions in crime and safer communities across the territory."
The CLP government was failing Territorians badly, Ms Uibo said.
"Their refusal to invest in meaningful crime prevention will have consequences that reach well beyond this budget cycle," she said.
"If the CLP believes their decisions aren't contributing to the territory's rising crime rates, then they are not just out of touch, they're delusional."
Ms Uibo said Chief Minister Lia Finocchiaro had promised her government would establish boot camps in Alice Springs and Darwin to give courts a place to send youth offenders as part of sentencing, but there was no sign of them.
A promise to make diversion programs mandatory for youth offenders had also failed to materialise.
Ms Finocchiaro has insisted her government is taking action to break the cycle of crime through early intervention, education, family support and housing initiatives in the budget.
That included reforms to improve school attendance and hold parents accountable for ensuring children's attendance.
Ms Uibo said the budget was the most expensive ever and showed the chief minister's big promises about reining in debt and responsible fiscal management were "up in smoke".
The debt, forecast to steadily decrease under the former Labor government's stewardship, would blow out in the next three years under the CLP, she said.
The budget showed the territory's net debt sat at $10.55 billion and was projected to rise to almost $14 billion by 2028/29.
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