The Auditor-General says recently published long-term plans for councils show they are not planning to raise rates to unreasonable levels.
The Auditor-General's Office says recently completed plans for 77 councils out to 2022 show their running costs increasing at 4% per year.
It says councils are planning to live within their means and that 5% annual increase in rates forecast between now and 2022 were not unreasonable.
The office says increases in capital expenditure in areas such as water and public transport are often to meet new standards being imposed on the councils.
Local Government New Zealand says the report proves that recent legislation tightening the definition of what ratepayers' money can be spent on was unnecessary and vindicates its opposition to the Local Government Amendment Bill.
President Lawrence Yule said councils have responded to the slowdown in the economy by taking a tougher line on spending of their own accord.
"Spending is being constrained and councils certainly are trying to live within their means, and the majority of the spend is actually on core infrastructure - all the things we've been saying.
"So we as a country either have proper roads, proper water supplies, proper wastewater supplies or we don't - and that's what the majority of the spend is going on."
