When asked at a function in Queenstown yesterday whether the reforms would lead to fewer local government employees overall, he replied "we’ll see".
Mr Luxon said New Zealand had too many layers of government and too many elected local government representatives.
Removing the regional council level would complement the government’s "radical simplification" of the Resource Management Act (RMA) and support its pro-growth agenda.
"People create work and they create bureaucracy and that’s why we want to take out a layer of government, which is regional councils."
In what is being billed as the biggest shake-up of local government in 36 years, the government announced plans on Tuesday to replace regional councillors with the mayors of the regions’ constituent local authorities.
Each group of mayors, possibly with some ministerial-appointees, would be called "combined territories boards" and be tasked with developing plans for reorganising council responsibilities in their region according to government-set criteria.
The Otago Regional Council, one of 11 in New Zealand, encompasses the Dunedin City Council and the Queenstown Lakes, Central Otago, Clutha and Waitaki District Councils.
Mr Luxon said the extent to which territorial authorities amalgamated into a smaller number of councils in their region would "ultimately be decisions for local communities" and he was confident mayors would have the capacity to lead that process effectively.
Councils across the country were already collaborating better than they ever had, particularly as a result of the government’s Three Waters reforms.
He pointed to the Republic of Ireland as having a similar population to New Zealand’s, but it had only about 30 district councils and no regional bodies.
The environmental protection role performed by regional councils would not suffer as a result of the reforms, he said.
"We’re going to make sure we protect our environment, but we are also going to prioritise economic growth ... because that’s what creates jobs and opportunities for people."
He defended his government’s plan to get rid of regional councillors while touring a Queenstown production studio yesterday.
He answered questions from media after apologising to production managers for "gatecrashing" the studio on the first day of filming of A Remarkable Place to Die 2.
Meanwhile, elected leaders across the region yesterday were determined to take part in the consultation under way.
Central Otago District Mayor Tamah Alley said councils across the country had told the government local government was not fit for purpose and this was its response to that.
However, the proposal was just one piece of the puzzle; the upcoming RMA reform, expected before Christmas, would be crucial in shaping the role councils played in their communities, she said.
One of the challenges was working out how mayors, already engaged full-time working for their communities, could manage responsibility for another council.
"Councils across New Zealand have spent recent years considering what reform could look like and we’re ready for the conversation.
"We know the current structure and funding mechanisms for local government are unsustainable."
"The discussion document is now open for public feedback. I encourage everyone to review it online and share their views — positive, negative or otherwise on how democracy can best serve the people of Otago into the future."
Waitaki District Mayor Melanie Tavendale said the proposed changes to local government were significant and far-reaching.
Waitaki would "engage fully" with the reform proposals to secure the best possible future for the district, she said.
"Change is something we have long embraced. We are committed to improving services, driving efficiency and achieving better outcomes for our people.
"Together with our neighbours in Canterbury and Otago, we will take the time to assess these reforms carefully — identifying opportunities and managing risks — so that our response reflects what matters most, the interests of our community."
Otago Regional Council deputy chairman and Moeraki constituency representative Cr Kevin Malcolm said the time was "absolutely right" to reform local government.
"However, this reform will only occur with government direction," he said.
"I have long been in favour of the unitary council-type model, but with the caveat that we retain a strong local voice.
"Otago has five territorial authorities and a regional council — why have we not got one computer system, one set of rules, one strategic direction that delivers the very best Otago possible?"
Canterbury Regional Council (ECan) chairman Dr Deon Swiggs said ECan had long agreed the present system needed reform.
"We genuinely welcome the opportunity to improve outcomes for our communities.
Environment Southland chairman Jeremy McPhail said the proposal added urgency to conversations that were already under way in Southland.
"Getting the balance right between local delivery and national direction is critical," Cr McPhail said. — Additional reporting Allied Media
