Mr Little said the testing could have merit if it was part of a wider rehabilitation programme for alcohol or drug addicts.
He said the anklets could be used in a similar way to court-ordered anti-violence courses for bailed offenders who had beaten up their partners.
"If the policy is to address the risk of alcohol abuse pending somebody pleading guilty or being found guilty, then I personally wouldn't have a problem with it. But if it's just to create a restriction when none is needed, then that clearly is wrong."
Corrections officials expressed some concern that expanding testing could encroach on people's rights to be free of unreasonable searches. But the minister's office confirmed that the Ministry of Justice had vetted the legislation and found it did not breach the Bill of Rights.
The bill included three principles which said testing could not be too intrusive, too frequent or affect people's privacy or dignity.
About one-third of all recorded offences involve drinking, and up to 5000 people on community sentences or home detention and 15,000 people on bail are required by a court order to avoid drinking.
Out of this group, nearly 500 of the most high-risk offenders would be tested a year.
The scheme would cost $3 million in the first year and $2 million in following years. The anklets cost $1800 each.
It is National's latest attempt to target the most high-risk offenders with technological changes.
Corrections is carrying out a procurement process for a number of high-tech devices including GPS devices, on-body cameras and the alcohol-testing anklets.
Keeping tabs
• 20,000 people on bail, home detention or community sentences who are not allowed to drink.
• National wants random drug and alcohol testing for a select group of around 500 of this group.
• Offenders would wear alcohol-detecting anklets or face random breath tests.
• Those who breach alcohol bans would be arrested or recalled to court.