Local body councils will be required to focus on core services such as roads, rubbish, libraries and disaster management under new reforms unveiled on Wednesday.
But Local Government Minister Rodney Hide has failed to secure the Cabinet's support to introduce referendums designed to give ratepayers a say on major council projects.
The minister was keen on the idea, saying local bodies should be more accountable when they want to go beyond providing basic services.
Mr Hide says councils' operating costs will increase by 39% over the next decade, with debt forecast to rise to $10.8 billion.
The new focus on infrastructure, solid waste, libraries and recreation, culture and heritage, and regulatory responsibilities will help curtail those costs, he believes.
Councils will also be required to provide easier-to-understand financial information and pre-election reports to provide more transparency and accountability.
Other changes being made include more flexibility to allow for public-private deals for building and operating water and wastewater treatment plants. The 15-year limit on such contracts will be extended to 35 years.
Mr Hide says he is disappointed that the Cabinet did not agree to referendums being required.