Councils are being warned not to slash rates in response to the coronavirus crisis, with a Cabinet minister saying it could cost them government funding.

Economic Development Minister Phil Twyford delivered the blunt message at a meeting this week featuring local government leaders from Hamilton, Waikato and Waipā.

Asked if the Government has adopted a stance on local government rates, Twyford said his own view is councils should resist reducing rates.

"Don't cut your rates," Twyford said.

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"If you want Government to be a partner, investing alongside you in your communities, we expect you to use your balance sheets and do your bit."

Councils nationwide have come under increasing pressure to either freeze or reduce rate hikes in response to the Covid-19 crisis.

But Twyford told attendees any move by councils to trim rates will impact the Government's ability - or willingness - to invest in any proposed partnerships.

The Government has already shown it is willing to use its balance sheet to invest in infrastructure and community projects.

"If you deliberately cut your revenue by scaling back rates increases, or going for zero rates, or cutting rates, how can I stand up with my colleagues and make the case that we should be investing alongside you. I can't do that."

TOM LEE/STUFF Hamilton Mayor Paula Southgate says it would be helpful if the Government adopted a position on council rate cuts (file photo).

Twyford told the civic leaders public investment is needed to give the private sector confidence and hope. If councils were to reduce their rates bill, that would "make matters worse".

"Central government, we've demonstrated we are willing to use our balance sheet here ... but we need you to be partners alongside us. If you cut your rates, you can't do that. If councils cut their rates, I will not be able to advocate for us to make up the difference and bail you out."

Waikato Regional Council chair Russ Rimmington didn't participate in the meeting of Future Proof partners at which Twyford spoke but had the minister's comments relayed to him.

Rimmington is focused on delivering a zero per cent rate increase for the next financial year and told Stuff he was "absolutely appalled" by Twyford's remarks.

SUPPLIED Waikato Regional Council chair Russ Rimmington (file photo).

"Here we are trying to be responsible, going through our expenditure line by line to try and be more efficient, and at the same time not introduce a slash and burn to our projects or services," Rimmington said.

"His [Twyford's] comments were a little bit threatening because we've obviously just spent weeks on these shovel ready project proposals and we don't want to see those jeopardised."

The Government has said it will fast-track spending on major infrastructure projects as part of nationwide efforts to kickstart the economy and called for public and private agencies to provide a list of shovel ready projects.

Waikato has submitted 23 proposed projects for funding.

Hamilton Mayor Paula Southgate hasn't formed a view on whether the city council should cut rates, saying it isn't a "black and white issue".

While many households are experiencing hardship, the council needs to be in a financial position to help get the economy up and running, Southgate said.

STUFF Taxpayers' Union executive director Jordan Williams (file photo).

"If we want the Government to stand beside us and bring their money to our table to benefit our community, we must invest alongside them because that's only fair and reasonable," she said.

City councillors will consider the council's draft annual plan in June. The council is expected to strike the rates at the end of July.

Hamilton Deputy Mayor Geoff Taylor is advocating a reduced rate rise and wants some capital projects deferred or cut.

The Taxpayers' Union has called on all councils to freeze any proposed rate increases. Union executive director Jordan Williams said Twyford's comments were a "brain fart" and didn't appear to reflect the Government's stance on rate cuts.

"At a time when every household in the Waikato is having to trim costs, the idea that councils should continue to reach deeper into ratepayers' pockets is frankly disgraceful," Williams said.