Local Government Minister David Carter says the government wants the power to intervene if councils increase rates too much.
Mr Carter told TV One's Q+A programme that he was pushing through local government reforms flagged by former minister Nick Smith and measures coming into parliament in the next few weeks would tighten the purpose for which local councils could act.
There would not be a "hard cap" on rates but the government wanted an ability to "manage" rates.
"Certainly if a council was proposing to put up its rates by 2 per cent, or 3 per cent, or 4 per cent above inflation, we want to know why they're doing that in central government so we have the ability to intervene and talk to that council.
"At the moment, the ability of central government to interfere with a local government decision around rates is very, very limited, and we want more ability for central government to work more closely so we can manage some of these very large rate increases that have occurred in the past," he said.
The government will impose financial tests and thresholds on local government to justify both increases in rates and increases in debt.Kaipara District Council is proposing an average rate rise of 31 per cent after it experienced a blowout in the cost of a wastewater project, and business groups have questioned a rise in council rates in Christchurch, arguing the council should consider selling assets.
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