Summary
- Most councils in New Zealand borrow from the Local Government Funding Agency (LGFA) and that agency sets a cap on how much each council can get into debt.
- Each council is “currently able to borrow up to 285% of its revenue based on the LGFA’s current financial covenants policy”.
- The LGFA has approved a “bespoke Net Debt/Total Revenue covenant for high growth Councils”.
- These “high growth” councils can apply to increase their debt limit to 350% of total revenue.
- Despite Hamilton being regarded as one of New Zealand’s fastest growing cities, Council staff recommended not applying for the increased borrowing limit.
- On the 24th of June 2025, Hamilton’s Finance and Monitoring Committee voted unanimously to support the staff recommendation not to apply for an increase to their debt limit with the LGFA.
Finance and Monitoring Committee 24 June 2025 – Open (Unconfirmed) Minutes
Links
Meeting Agenda
Open (Unconfirmed) Minutes
Video of the Council meeting:
Further reading on this issue
KPMG International Publication – “The Great Reset: Emerging trends in infrastructure and transport”
OPINION: The 2025/26 HCC Budget – More of the Same and No “Fresh Thinking” (Yet) for Election Year
