Newstalk ZB is reporting that Overall debt levels for local councils are on the rise.

Briefing documents to new Local Government Minister Rodney Hide show local authority debt levels rose by more than 60 percent between 2004 and 2007, from $1.9 billion to more than $3.2 billion...The papers say councils which rely on funding from investments may face substantial losses, because of the decline on world markets. They also indicate some councils are having trouble accessing debt funding and some that have it face severe constraints in servicing their loans.

Hide told council representatives at Parliament that they have to set financial priorities and stick to them. “I’ll be ... encouraging councils to set priorities and budget more carefully, particularly in these economic times when ratepayers and taxpayers are having to budget extra carefully themselves.”

Hide is likely to just be using the current financial crisis to push an ideological agenda, his ACT party’s local government policy states that “local government should be confined to the core activities.”
This approach that New Zealand is taking to dealing with the recession is in stark contrast to the approach in Australia, as Gorden Campbell has reported:

[Australian Prime Minister Kevin] Rudd is treating local government as the best, most readily available jobs engine to soak up the unemployment bound to flow next year from the global recession... Rudd is making $A250 million immediately available to councils in a one off funding infusion, with every council receiving a minimum $A100,000 funding boost at least. An additional $A50 million for larger infrastructural projects is also being made available

When one of New Zealand’s local councils is currently refusing to upgrade its social housing, an Australian-style funding increase would do far more social good than Rodney Hides new-right policy.