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Mr Familton, who has recently become a Dunedin ratepayer, advised the council to be cautious in a time of uncertainty.
He noted the council was facing a potential debt of more than $800million, which was a daunting challenge, and Mr Familton suggested pausing for a three-year "breathing gap".
The late prime minister Mr Lange announced in 1988 that there would be a "cup of tea" after an intense period of government reforms.
Mr Familton also suggested the council think seriously about being part of a unitary authority with the Otago Regional Council.
"We have a small population. We don’t need these boundaries," he said.
He declined to be specific about which organisations should be involved in such an authority.
Mr Familton praised the city council for its handling of the Waikouaiti water contamination scare, particularly councillors turning up at a public meeting and Cr Jim O’Malley’s science presentation there.
"You started a healing process," Mr Familton said.