Prime Minister John Key exhorted about 600 local government conference-goers in Queenstown to tighten their belts.
“Times are tight and ratepayers just can’t endure unaffordable rates rises," he told them.
"We are not telling you how to do your jobs, but we would urge you to think carefully about the capacity of your communities during these difficult financial times.
“I know it’s not easy, and it’s tempting to think your council is an exception or faces special circumstances, but we all have to face up to making difficult choices.”
Mr Key cited the unemployment rates in Spain and Greece of 25% and 22%, respectively.
New Zealand can’t help but be affected by the financial events overseas, he says.
Local Government New Zealand president Lawrence Yule says councils cannot afford to meet higher standards such as earthquake strengthening in shorter times such as five years. He also opposed water privatisation.
Mr Yule challenged the government to leave the Local Government Act 2002 alone and reconsider plans to elevate economic considerations above community wellbeing.
“If one of the reasons for the changes is to limit the role of local government then we question this approach,” he says.
New Zealand’s 78 councils make up 4% of GDP, spending $7.5 billion of public money each year. And they manage $100 billion worth of assets.