Local Government Minister Rodney Hide says he will soon announce changes to legislation which will help stop rates spiralling out of control.
Mr Hide said he had analysed the 2009-2019 long-term council plans and discovered operating costs would increase overall by 39 percent over the next 10 years.
During the same period, capital expenditure would total $31.4 billion and total debt was forecast to rise to $10.8b.
That meant people were going to face big increases in their rates bills, he said today.
"To help ratepayers stop their rates continuing to spiral out of control, the Government will soon announce changes to the Local Government Act 2002," Mr Hide said.
"These changes have come from the review I set up to improve the transparency, accountability and financial management of local government."
Mr Hide said the review was about local government focusing on core functions, managing within a defined budget, and adopting transport and accountable decision-making processes.
"In these challenging economic times councils need to think carefully about the impact of rates increases," he said.
"There needs to be some serious thinking about the trade-offs between the services local communities want and what is an acceptable level of rates increases."
