The System provides fair Course Handicaps for players regardless of ability, and adjusts a player's Handicap Index up or down as the player’s game changes. At the same time, it disregards high scores that bear little relation to the player's potential scoring ability and promotes continuity by making handicaps continuous from one playing season or year to the next. A Golf NZ Handicap Index is useful for all forms of play.
For full details on the Golf NZ handicap system see
here