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Local Government Borrowing Act 2011

Crown relationship with Funding Agency

16: No Crown guarantee for debts of Funding Agency

You could also call this:

"The government does not promise to pay back debts owed by the Funding Agency."

Illustration for Local Government Borrowing Act 2011

The Crown does not guarantee any debts of the Funding Agency. If the Funding Agency borrows money, the loan agreement must say that the Crown does not guarantee the loan. When the Funding Agency makes a loan agreement or an incidental arrangement, it means an arrangement that is related to the loan, and this arrangement is explained in section 112 of the Local Government Act 2002, which you can find on the legislation.govt.nz website.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM3620735.

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15: Crown may lend money to Funding Agency, or

"The Government can lend money to the Funding Agency to help with temporary problems."

16No Crown guarantee for debts of Funding Agency

  1. No debt of the Funding Agency is guaranteed by the Crown.

  2. If the Funding Agency enters into any loan agreement or incidental arrangement, the agreement or arrangement must include a statement that the loan or liability under the agreement or arrangement is not guaranteed by the Crown.

  3. In this section, incidental arrangement means an arrangement that would, if the Funding Agency were a local authority, come within the meaning of that term in section 112 of the Local Government Act 2002.