The Central Australian Aboriginal Legal Aid Service says comments from a local MP undermine work to divert people from prison.
But CAALAS Principal Lawyer, Mark O'Reilly says Indigenous incarceration rates in the Territory are a disgrace and the government should be doing everything in its power to keep people out of prison.
"There are a lot of organisations around that are doing a lot of good work to try and support people in the community and improve conditions," he said.
"It's very disappointing to hear that resignation about jail being a safe option."
Mr O'Reilly says prison should be used as a last resort when sentencing young offenders.
"The reality is that there is an over representation of Aboriginal people and Aboriginal young people in prison.
"And the situation is we should be doing something to remedy that. Not embracing it."