Labour plans to reinstate the power for local bodies to raise revenue through extra levies such as a 'pillow tax' on visitors and regional petrol taxes.
Labour's Local Government policy will also require a referendum to be held before any local council amalgamations can go ahead.
Local communities would also have to be consulted before council services were contracted out or privatised.
Local Government spokesman Sua William Sio said Labour was not opposed to amalgamations, but did not believe they were appropriate in all cases.
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He said the Auckland supercity model was opposed by many Aucklanders "and designed to take control away from the hands of the many and vest governance in the hands of the few."
He said Labour would encourage Auckland Council to hold a full public inquiry into how Auckland should be governed in the future. It would also restore Auckland Council's powers to decide on its own structures for the delivery of transport and roading, and over which Council-controlled organisations it retained, as well as land use and housing planning.
As well as rates, Labour says it will allow council to raise other revenue, including recovering costs to communities which are generated by visitors. That could include tourist taxes at attractions or accommodation.
Regional fuel levies are a controversial topic: councils could apply to central government to use them to raise funds for specific projects, as happened in 2008 when the former Labour Government approved their use for the electrification of Auckland rail. That decision was overturned under National in 2009 when it replaced Auckland's proposed regional fuel taxes and said it would provide the funding from broader nation-wide fuel excise taxes and road user charges.
Auckland Mayor Len Brown has also had subsequently pleas to be able to impose a regional fuel tax for Auckland transport projects refused.
Mr Sio said local governments had lost much of their autonomy over local decisions under the National Government.
He has also proposed setting a councillor to ratepayer ratio to ensure adequate local representation, saying New Zealand has become the most centralised countries in the OECD.