One mayor says the government's decision to lift the debt cap for fast-growing councils will make a material difference

For some, the change will allow them to increase debt-to-revenue limits to 350-percent.

Local Government New Zealand President Sam Broughton, who's mayor of the Selwyn district, says while they're looking at alternative funding options, this borrowing capability is valuable.

He says the government is responding to the issue of rates affordability and New Zealand's infrastructure deficit.