Treasury's delivered a scathing critique on the performance of local councils in handling Resource Management Act matters.

The criticism's revealed in just released papers written in September 2014.

In them, Treasury says its research shows councils can find it hard to make good decisions when they're difficult or unpopular.

The report says the incentive for councils not to make decisions is greater when they're made by elected councillors.

Treasury says they may have a tendency to delay or avoid difficult decisions, or make poor decisions to ensure they're re-elected.