The Government wants to see more councils amalgamate in order to reduce rates, Prime Minister John Key says.
Mr Key was defending the Government's proposed Local Government Amendment Act in his speech yesterday at the start of the Local Government New Zealand (LGNZ) conference.
The legislation came under fire from LGNZ president Lawrence Yule in his keynote speech.
The amendment Act would have "huge implications'' for local communities and local democracy, Mr Yule said.
There is concern among councils the legislation could lead to local authority amalgamation by stealth, and local government losing legal powers.
Mr Yule said the legislation would allow the Local Government Commission to determine where council-controlled companies would be established and operate.
It could be done without council and local community agreement or oversight, he said.
"From our view, Prime Minister, aspects of this legislation as proposed are not productive for local democracy nor delivering increased value.
"We believe that communities and regions are strongly placed to determine their own affairs, and to govern them for their communities.
"Local democracy works best when decisions are made and are accountable at a local level.''
Mr Key responded by confirming the Government wanted more councils to amalgamate as a means of reducing rates.
"We're not disguising the fact that we believe there is some benefit in amalgamation.
"I think what we're trying to do around the potential amalgamation of services is not ram it down local government's throat.
"What we're trying to say is, the reality is rates aren't going down. Rates are going up.
"The bulk of local expenditure as you know, is in infrastructure.
"The question is, how do you deliver more with the same [amount of money] - and that's what amalgamation is about.
"The challenge is for you to work out whether you can deliver those services individually, or whether it's better on a shared basis.''
Mr Key believed the amalgamation of councils could work well, and used Auckland as a case in point.
"It's been the making of Auckland.''
Previously, working with the city meant liaising with multiple mayors, which made it difficult to get things done, he said.
Now there was only one mayor, which made the process easier.
He told delegates they could trust the Government to go away and carefully consider the concerns about the legislation.
"The relationship between central and local government is a very good one.
"We try to listen to some of the things you're [local government] telling us. We go away and take on board what you're saying.
"We're not there to lecture local government, and local government doesn't lecture us.''
The three-day conference has drawn 565 delegates from throughout the country.
