Chris Hipkins says the country needs an honest conversation about funding local government

Homeowners nationwide are facing sharp council rates increases - on average more than five times current inflation.

Wellington City Council rates are up an average 18.5 percent.

Labour leader Hipkins says small councils in particular are struggling to keep up with infrastructure costs.

He says the way water is being delivered is inefficient - and ratepayers will end up paying more - but the Government has washed its hands of the problem.