Proposed "draconian" powers over local councils are being resisted by the Rangitikei District Council. And the Palmerston North City Council agrees.

Central government should keep out of local council business except in extreme cases, the councils plan to tell an upcoming select committee on local government reform.

The city council's submission says local councils should not be threatened with the same kind of central government intervention used on schools and health boards.

Health and education are paid for from taxes, and so government controls were appropriate.

But councils raise their money from ratepayers, and they should maintain control of local decisions about spending.

Interventions such as the appointment of Crown managers or commissioners were "serious moves that suspend local democracy," it said in its submission on the Local Government Act 2002 Amendment Bill.

The Rangitikei District Council's submission also opposed the extension of ministerial intervention powers, which Mayor Chalky Leary called "draconian".

He labelled the bill a “paper tiger,” saying central government was coming down on local government to pander to public interest in issues such as council staff salaries.

“The Government are trying to do their job. We're going to ask them to try and find ways to modify their approach a little because some of it is quite draconian,” Mr Leary said.

Rangitikei councillors yesterday considered whether local government reform foreshadowed more council amalgamations and authorities would have to address whether a single rating system should be imposed in such cases.

“There is nothing to stop us becoming part of the greater Manawatu or Whanganui district or any other district,” Mr Leary said.

The city council was also worried the threat of intervention, along with centrally-imposed spending guidelines, would limit councils' ability to respond to local demands for service and encourage short-term cost cutting.

"The change in purpose could lead to councils making short-term decisions . . . postponing spending on major infrastructure . . . that actually add to long-term costs or that miss long-term opportunities."

It also argued that stricter rules were not necessary because spending is not out of control, and debt repayment costs at an average 4.53 per cent of income are well below internationally accepted benchmarks.

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