Local Government Minister Rodney Hide has told council representatives at Parliament on Monday that they have to set financial priorities and stick to them.
Mr Hide was discussing pressures facing local authorities with council representatives on Monday morning, including costs imposed by central government.
However Mr Hide, who has twice tried to introduce laws capping rate rises to the rate of inflation, said he still expects councils to deliver value for money.
He said the aim should be for both local government and central government spending to be held to the rate of inflation.
"I'll be ... encouraging councils to set priorities and budget more carefully, particularly in these economic times when ratepayers and taxpayers are having to budget extra carefully themselves."
Mr Hide said the financial loss suffered by the Auckland Regional Council after the exhibition football match featuring David Beckham on Saturday shows it has money to throw around.