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Austerity in Britain

Written By: - Date published: 10:59 am, July 26th, 2012 - 45 comments
Categories: economy, national, uk politics - Tags:

In Britain the Tory government’s austerity measures are working so well that they have created the worst double-dip recession in 50 years:

Shock 0.7% fall in UK GDP deepens double-dip recession

Britain’s economic output collapsed by 0.7% in the second quarter of 2012 as the country’s double-dip recession extended into a third quarter. …

Analysts in the City had expected a 0.2% drop in gross domestic product in the three months to June and were stunned by the scale of the fall in activity. The decline followed the 0.3% fall in the first three months of 2012 and a 0.4% decline in the final quarter of 2011. …

The news will come as a fresh blow to the chancellor, George Osborne, whose deficit reduction plans have been thrown off course by the poor performance of the economy. Output has declined in five of the last seven quarters.

Osborne said: … “We’re dealing with our debts at home and the debt crisis abroad. We’ve made progress over the last two years in cutting the deficit by 25% and businesses have created over 800,000 new jobs. “But given what’s happening in the world we need a relentless focus on the economy and recent announcements on infrastructure and lending show that’s exactly what we’re doing.”

Doesn’t it all sound very – familiar? A government with no plan except cutting spending is holding the economy back. The only thing that’s growing is the volume of the rhetoric, right down to the “relentless focus on blah blah blah”.

In NZ we technically avoided a double dip recession. Just. But we’re still stuck in the doldrums. The theory of “expansionary austerity” is nonsense. Government austerity has caused nothing but damage in Britain, and (lesser) austerity is causing nothing but (lesser) damage here. No doubt the economy will limp it’s way back to growth some time. No doubt the Nats, if still in power, will claim credit when it does. But the truth is that any recovery will be in spite of the Nats, not because of them.

45 comments on “Austerity in Britain”

  1. sweetd 1

    Austerity hasn’t started in Britian. They are still spending as much as before.

    • Caniculitis 1.1

      Yup, including 9.5 billion sterling (plus the rest) building new railway lines for the private railway companies to run their trains on.

      Oh, but they are cutting the subsidy for private companies to build wind-farms by 10%.

      • Colonial Viper 1.1.1

        I guess you brainiacs don’t count over 150,000 local council job losses as being public sector “austerity”

        http://www.guardian.co.uk/society/patrick-butler-cuts-blog/2011/feb/02/council-job-cuts-total-hits-150000

        You guys are deluded.

        • sweetd 1.1.1.1

          Which part of they are still spending as much as before don’t you get? Britian has not begin being austere.

          • Colonial Viper 1.1.1.1.1

            Who cares what the financials say?

            Austerity has already hit ordinary working people hard. Like those unemployment numbers you decided were irrelevant.

            You can say that real austerity hasn’t hit yet, from a budgetary standpoint. But for millions it already has in their day to day lives. Maybe they are not the people who matter to you though?

            • Rusty Shackleford 1.1.1.1.1.1

              Ha! Classic CV! No need to actually engage with what the person is saying, or bother with facts or anything. Why would you when it’s so much easier and fun to screech “OOOOHHHHH won’t somebody think of the CHILDREN!!!!!” at the top of your lungs.

              • McFlock

                Well, somebody has to think of the children. Right wing governments sure as shit don’t.

                • Rusty Shackleford

                  I was speaking figuratively.

                  • McFlock

                    No, really? 
                    I was merely pointing out that the oft-derided “won’t somebody think of the children” outburst can be reasonably used, on occasion. For example many of the Tory welfare policies, here and in the UK, do indeed hurt children. Similarly, the harm that rorting tory parasites cause the working classes needs to be pointed out when tories try to imply that there’s no ‘real’ austerity or minimise suffering. 
                           
                    “Austerity”, like damned near every other tory policy, is simply the process of stealing from the poor to give to the rich. Total expenditure is irrelevant – the question is “on what and for whom does the government spend money?” 

                  • Colonial Viper

                    Treasury beancounters forecast balanced books while standing on the shoulders of a drowning populace.

                    (Actually they don’t, the entire western world is going under).

              • Colonial Viper

                Rusty:

                Ha! Classic CV! No need to actually engage with what the person is saying, or bother with facts or anything.

                Like I said, you’re ignoring the most important facts: the people on the ground. Of course, you don’t consider them important. Which is also what I said.

                BTW talking to people who work for some of the local multi-multi-millionaires: austerity is really affecting their wealthy clients too. Who are putting off buying new holiday baches, delaying new business projects by 6 months, doing some sectors of their world trip in business class instead of all in first class.

                The sacrifice is horrendous, I’m sure you will admit.

                • Rusty Shackleford

                  Fine whatever. I’m not going to get into a debate about who has the best intentions. Because intentions don’t mean shit if you aren’t getting results.

                  Just don’t claim that the British economy is in a recession because of govt spending cuts. The British govt didn’t cut spending.

                  • Colonial Viper

                    You’re such an asshole.

                    How can 150,000 public sector job cuts not affect the Main St economy? How can real spending cuts on elderly and the disabled not affect the Main St economy?

                    How can you not get that replacing a dollar of spend into local communities with a dollar of spend on the rich materially changes the Main St economy.

                    Fuck you and the uneconomic donkey you rode in on mate.

                    • Rusty Shackleford

                      “How can 150,000 public sector job cuts not affect the Main St economy?”
                      Where did I ever say it wouldn’t? If you cut spending out of the economy, you are going to take an instant hit, but those jobs don’t actually produce anything. They are basically a black hole. The money for those jobs had to first come out of the productive economy. If you put that money back into the productive economy, you get output. Putting it into the public sector gets you the dead weight loss from taxation.

                      “How can you not get that replacing a dollar of spend into local communities with a dollar of spend on the rich materially changes the Main St economy.”
                      This is a strawman. I wouldn’t forcefully take money from one person and give it to another in any case. If I was forced to make a choice I would give it to the poor, but if it were my choice I wouldn’t take forcefully take money off anyone to give to another. I give money away when I’m asked all the time.

                    • Draco T Bastard

                      Putting it into the public sector gets you the dead weight loss from taxation.

                      Taxation isn’t a dead weight loss – it’s payment for services rendered. Vital services in fact. The dead weight loss is profit. More profit, more dead weight loss and the eventual collapse of the economic system – exactly as we’ve just seen with the GFC.

                      This is a strawman.

                      No it wasn’t. Everything you said after that was though.

                    • Rusty Shackleford

                      Go to a desert island, set up a ton of “services” and watch the people come flocking, happily willing to pay for “services rendered”.

                      It doesn’t work that way. In order to have taxes you have to have a productive sector of the economy. When you tax that production some value is lost that won’t be gained by anyone.

                    • Colonial Viper

                      “How can 150,000 public sector job cuts not affect the Main St economy?”
                      Where did I ever say it wouldn’t? If you cut spending out of the economy, you are going to take an instant hit, but those jobs don’t actually produce anything. They are basically a black hole.

                      Yeah, because caring for the elderly, teaching the young, maintaining our parks and natural environment are unproductive ‘black hole’ jobs.

                      Well fuck you. Because the real unproductive assholes in this economy, the ones you spend 1/100 your effort on compared to targetting ordinary people, are the rentier capitalists.

                    • Rusty Shackleford

                      eerrrmmm, most of those jobs are done by private contractors. Or could easily be done by the private economy.

                    • Colonial Viper

                      Please explain how the same work maintaining park grounds suddenly transforms from being an unproductive black hole in the economy, to suddenly being productive work – just because a similarly qualified private contractor is doing it instead of a similarly qualified council worker?

                      Fuck you’re dumb.

                    • McFlock

                      Go to a desert island, set up a ton of “services” and watch the people come flocking, happily willing to pay for “services rendered”.  

                      But we already did that – not a desert island, it’s called “New Zealand”. Growing population for 150 years. Generally more so under left wing governments, wars notwithstanding.
                         
                      The only downside with it is the tendency for rightwing dickeads to turn up and bitch. 

                    • Draco T Bastard

                      In order to have taxes you have to have a productive sector of the economy.

                      Yes, you’ve said that before. It was wrong then to.

                      The first thing you need is resources including human capital. That means the first thing you need is a community that needs administering. The administrators are paid from taxing everyone else because it’s the cheapest and easiest way of doing so.

                      Early on in a society profit is actually a tax for services rendered as the capitalists did the administration (the same reason we have government) but later the capitalists get the idea of charging interest and paying others to do the administration. At that point, profit is pure dead weight loss* and that’s the point that our society has got to.

                      * This is proved by the actions of Telecom. Paid billions of dollars over 20 years of which ~$15b was pulled out in profit and now we’re paying them even more to do what the original billions was for and wasn’t done due to the massive profits the private owners had pulled out. Work that would have been done if Telecom had remained state owned.

                  • McFlock

                    More semantic bullshit.
                       
                    The common use of the term is to cut deficits, not spending per se. So they cut public services while increasing user charges. 
                        
                    But based on the last year or two, there does seem to have been a slight decrease in spending in the UK, so frankly toryboys are once again full of crap.

        • Lostinsuburbia 1.1.1.2

          Yep and the wage freeze on local council workers that’s been going for several years now. Until March last year I was working for a Council in East London. The budget cuts were very heavy and the downturn in the economy and Govt spending was evident in the local communities too. The wheels are truly coming off British society. Coming back here was the best thing i could do.

    • mike e 1.2

      Sweety they are borrowing more because of cuts Austerity less money in circulation means less taxes much less in fact!
      So much so that they had predicted a budget surplus by 2013 but instead the Tories have borrowed 20% more than last year.
      So there is your Austerity theory RWNJ’s!
      It does not work.
      Never has.

  2. Zaphod Beeblebrox 2

    Its not actually austerity that conservative governments like to indulge in. More like transferring the welfare system to benefit the corporate system instead of those that actually need it (and can spend it in a way that benefits the economy). Government deficits are actually increasing in Britain and NZ.

    Giving tax cuts to upper income earners and building billion dollar roads hardly qualifies as austerity.

    • prism 2.1

      ZB And spending zoomed up in the USA after Ronald Reagan who was going to get government cheaper and welfare tamed

  3. ghostwhowalksnz 3

    The British economy has fallen further than the French since the start of the GFC.

    • Colonial Viper 3.1

      Ah, that’s only an issue of timing, right? 🙂

      UK shouldn’t be too reassured, 50% youth unemployment amongst blacks, highest rates of women unemployed in the last 25 years.

      Plus a big surprise negative drop in GDP this quarter, one that no one saw coming.

    • rosy 3.2

      Worst performing economy in the G8 – bar Italy, and the economy is smaller than when the Conservatives took office.

  4. Draco T Bastard 4

    The theory of “expansionary austerity” is nonsense.

    So is the infinite growth meme. Actually, the economic system we use is bollocks. Continuing to tinker with it in the hope that it will suddenly start working after it’s failed for centuries is delusional.

    • aerobubble 4.1

      It become bollocks when Thatcher decided to introduce Monetarism. Government
      intervention into the market. Opening up leveraging, a social fiscal revolution, that
      debased, has debased, all valuations within the world economy since.

      The closer you are to a banker the better able you are to leverage your wealth at
      a higher rate, this has nothing to do with the natural invisible hand of markets,
      its a giant short circuit of the whole economic reward system.

      If you have a mate in banking, you can buy out a great idea from someone, and
      create your own niche global monopoly, it has nothing to do with your intrinsic
      brilliance or worth to the ‘greater growth’.

      Now big money owns everything, the factories, the boardrooms, the presses,
      they are the problem now.

      But wait its worse. There are three disasters unfolding. The fiscal is merely the
      least worse, and its really bad. The primary is the resource limits, secondary
      is climate change, and only lastly is our maligning snob global class.

    • Colonial Viper 4.2

      Please forward on to Labour.

  5. JonL 5

    “But the truth is that any recovery will be in spite of the Nats, not because of them.”

    Since when has it been any different………

    • mike e 5.1

      BBc world has been infiltrated by right wing economists towing the TORY party line.

  6. Rusty Shackleford 6

    By how much have the UK govt cut total spending?

    • Colonial Viper 6.1

      They’ve cut spending on poor people a shitload. But that doesn’t count to you right?

      • Rusty Shackleford 6.1.1

        I wouldn’t forcefully take money off one person and give it to another in any case. Whether they be rich or poor. So, no. It doesn’t count to me. But, I wouldn’t give money to rich people, either. So, at least I’m consistent.

        • McFlock 6.1.1.1

          I wouldn’t forcefully take money off one person and give it to another in any case.
           

          But you will gladly receive “stolen” money. 
          Not all that consistent. 

          • Rusty Shackleford 6.1.1.1.1

            Haha, I’ve gladly copped to being a hypocrite on more than one occasion in the past. This doesn’t make me wrong on anything I’ve said here, though.

            • Colonial Viper 6.1.1.1.1.1

              It surely does.

              • Rusty Shackleford

                In what way?

                • Colonial Viper

                  If you have been inconsistent multiple times, how can you claim to be usually correct?

                • McFlock

                  1) You just said you were consistent. You’re not, you’re a hypocrite
                  2) We have the assurance of an admitted hypocrite that he wouldn’t take money off people or give money to rich people. Although he’s perfectly happy to take it from the alleged thieves. How reliable is that, would you say?
                          
                  So the weak defence of some sort of “consistency” in your moral framework that you used to defend your utter disregard for the welfare of others falls down because you’re inconsistent and untrustworthy.
                     
                  Basically, people are suffering in an extreme way, and you don’t care. Not out of some moral code, not because you believe theft is wrong. Simply because you lack that little switch that is possessed by most people on the planet: that we should care about the hardship of others. That we should empathise with their pain. And that we should try to help them if we can.
                       
                  The fact that someone without empathy works for Work&Income describes our times and customs perfectly.  
                   

          • aerobubble 6.1.1.1.2

            When the rich pay little or no tax, but get huge representational influence, they are effectively being subsidies by the rest of us, that do pay our fair share. That’s an unfair advantage in the market place, that new much more innovative entrants can’t match (often brought out by the new aristocracy of wealth). The adage applies, no representation without taxation, no taxation without representation.

            The brilliant point is that if Romney wins the presidency, then the corruption of such a basic tenet of western civilization, will inspire many to get off their backsides and demand fairness.

    • DS 6.2

      You mean minus all that foreign aid and all those EU handouts? Still not sure but it must be a lot, I’ll just get some drunk to run the economy.

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    BeehiveBy beehive.govt.nz
    5 days ago
  • Gang crime, meth harm targeted in Waikato
    The Minister of Police says a major operation against the Mongrel Mob in Waikato will make a big dent in drug harm and violent offending linked to organised crime networks. “Senior leadership of the Waikato Mongrel Mob has been taken out as a result of Operation Kingsville, which resulted in ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Supporting victims and families to attend mosque attack sentencing
    The Government is extending the border exception criteria to enable some offshore victims and support people of the Christchurch mosque attacks to attend the sentencing of the accused beginning on 24 August2020, says Immigration Minister Iain Lees-Galloway. “We want to support our valued Muslim brothers and sisters who were directly ...
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    6 days ago
  • Boost for community freshwater restoration projects
    A project to support volunteer efforts to look after streams and rivers is getting a boost thanks to support from DOC’s Community Conservation Fund announced Minister of Conservation Eugenie Sage today.  “The government is backing efforts to look after waterways with $199,400 for the Mountains to Sea Conservation Trust from ...
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    6 days ago
  • More support for women and girls
    Minister for Women Julie Anne Genter today announced that funding for the COVID-19 Community Fund for women and girls will be doubled, as the first successful funding applications for the initial $1million were revealed. “Women and girls across the country have suffered because of the effects of COVID-19, and I ...
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    6 days ago
  • Crown accounts stronger than forecast with higher consumer spending
    The Government’s books were better than forecast with a higher GST take as the economy got moving again after lockdown, Finance Minister Grant Robertson says. The Crown Accounts for the 11 months to the end of May indicate the year end results for tax revenue will be stronger than forecast. ...
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    6 days ago
  • Govt releases plan to revitalise wool sector
    A plan to revitalise New Zealand’s strong wool sector and set it on a new, more sustainable and profitable path was unveiled today by Agriculture Minister Damien O’Connor. The newly-released report - Vision and Action for New Zealand’s Wool Sector - was developed by the Wool Industry Project Action Group ...
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    6 days ago
  • Funding for Predator Free Whangārei
    Community efforts to create a Predator Free Whangārei will receive a $6 million boost, Regional Economic Development Minister Shane Jones and Conservation Minister Eugenie Sage announced today. The new funding, through Government company Predator Free 2050 Ltd, will create around 12 jobs while enabling the complete removal of possums over ...
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    6 days ago
  • New Zealand to review relationship settings with Hong Kong
    Foreign Affairs Minister Winston Peters has announced that the New Zealand Government is reviewing the settings of its relationship with Hong Kong. “China’s decision to pass a new national security law for Hong Kong has fundamentally changed the environment for international engagement there,” Mr Peters said. “New Zealand remains deeply ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Funding for Whangārei’s infrastructure projects revealed
    Regional Economic Development Minister Shane Jones has announced details of a multimillion-dollar investment in Whangārei for infrastructure projects that will help it recover from the economic fallout from the COVID-19 pandemic. More than 200 jobs are expected to be created through the $26 million investment from the Government’s rejuvenation package ...
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    7 days ago
  • Managed isolation and quarantine update
    Following a second incident in which a person escaped from a managed isolation facility, security is being enhanced, including more police presence onsite, Minister Megan Woods said. “The actions of some individuals who choose to break the very clear rules to stay within the facilities means that more resourcing is ...
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    7 days ago
  • Funding for Kaipara district community waste programmes
    Waste reduction and recycling programmes in Kaipara are set to get a boost with Associate Environment Minister Eugenie Sage today announcing a $361,447 grant from the Ministry for the Environment’s Waste Minimisation Fund (WMF) Sustainable Kaipara. “The new funding will allow Sustainable Kaipara to partner with local schools, kura, community ...
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    7 days ago
  • Government will support the people and economy of Southland
    The Government will support the Southland economy in the wake of multinational mining company Rio Tinto’s decision to follow through with its long signalled closure of the Tiwai Point aluminium smelter. “This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • New transformational tools for the Predator Free 2050 effort
    New tools being developed to help boost Aotearoa’s Predator Free 2050 effort were unveiled today by Minister of Conservation Eugenie Sage and Under Secretary for Regional Economic Development Fletcher Tabuteau. A new rat poison, a camera with predator recognition software to detect and report predators, a new predator lure and a ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • New Armoured vehicles for New Zealand Army
    The Coalition Government has approved the purchase of a fleet of Bushmaster vehicles to replace the New Zealand Army’s armoured Pinzgauers, Defence Minister Ron Mark has announced today. The new fleet of 43 Australian-designed and built Bushmaster NZ5.5 will provide better protection for personnel and improved carrying capacity. “The age ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Community-led solutions to prevent family violence
    The Government’s three prevention frameworks to reduce family violence in Aotearoa were launched this week by Associate Minister for Social Development Poto Williams.   The frameworks were developed in partnership with communities around New Zealand, and build on the work the Government has already begun with its new family violence prevention ...
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    1 week ago
  • Govt confirms investment in better radiology and surgical services for Hawke’s Bay
    The Government is pleased to confirm funding for improvements to radiology and surgical services at Hawke's Bay DHB, Health Minister Chris Hipkins says.     "The Minister of Finance the Hon Grant Robertson and former Health Minister Dr David Clark approved funding for Hawke's Bay DHB’s redevelopment of their radiology facilities ...
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    1 week ago
  • Specialist alcohol and drug addiction services strengthened across New Zealand
    •    New funding for four beds at Napier’s Springhill Residential Addiction Centre •    A new managed withdrawal home and community service, and peer support before and after residential care at Tairāwhiti DHB  •    A co-ordinated network of withdrawal management services throughout the South Island •    Peer support in Rotorua and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Coastal Shipping Webinar
    Introduction, seafarers and POAL Good morning everyone, I am delighted to be online with you all today. Before I begin, I have to acknowledge that COVID-19 has disrupted the maritime sector on an unprecedented scale. The work of seafarers and the maritime industry is keeping many economies around the world ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Support for resilient rail connection to the West Coast
    A $13 million investment from Government will create jobs and improve the resilience of the rail connection between Christchurch and the West Coast, Infrastructure Minister Shane Jones and Regional Economic Development Under-Secretary Fletcher Tabuteau say. The funding comes from the tagged contingency set aside in Budget 2020 for infrastructure projects ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Major investment in safe drinking water
    The Government is investing $761 million to assist local government upgrade under-pressure water services across the country, Prime Minister Jacinda Ardern and Local Government Minister Nanaia Mahuta announced today.  The announcement was made at the site of the water bore that was found to be the source of the fatal ...
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    1 week ago
  • Supporting stranded seasonal workers to keep working with more flexible options
    Recognised Seasonal Employers and migrant seasonal workers stranded in New Zealand will be able to continue working and supporting themselves with more flexible hours and roles, says Immigration Minister Iain Lees-Galloway. The time-limited visa changes are: Stranded RSE workers will be able to work part-time (a minimum of 15 hours ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Relief for temporary migrants, employers and New Zealanders who need work
    The Government is making immediate short-term changes to visa settings to support temporary migrants already onshore in New Zealand and their employers, while also ensuring New Zealanders needing work are prioritised, Immigration Minister Iain Lees-Galloway says. We are: Extending temporary work visas due to expire by the end of 2020 ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Freshwater commissioners and fast-track consenting convenor appointed
    Professor Peter Skelton CNZM has been appointed as Chief Freshwater Commissioner and Alternate Environment Court Judge Craig James Thompson as Deputy Chief Freshwater Commissioner for the newly established Freshwater Planning Process (FPP). Environment Minister David Parker today also announced the appointment of Chief Environment Court Judge Laurie Newhook as the ...
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    1 week ago
  • Appointment of Judge of the High Court
    Auckland Queen’s Counsel Neil Campbell has been appointed a Judge of the High Court, Attorney‑General David Parker announced today. Justice Campbell graduated with a BCom and LLB (Hons) from the University of Auckland in 1992. He spent two years with Bell Gully Buddle Weir in Auckland before travelling to the United ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Feedback sought – Commercial Film and Video Production Facilities
    The Associate Minister for Greater Christchurch Regeneration, Poto Williams, is seeking feedback on a proposal to better enable the development and operation of commercial film and video facilities in Christchurch. The Proposal, developed by Regenerate Christchurch in response to a request from Christchurch City Council, asks that powers under section ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Govt launches bold primary sector plan to boost economic recovery
    The Government has launched a bold plan to boost primary sector export earnings by $44 billion over the next decade, while protecting the environment and growing jobs. Prime Minister Jacinda Ardern today released Fit for a Better World – Accelerating our Economic Potential, a 10-year roadmap to unlock greater value ...
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    1 week ago
  • Wellbeing of whanau at heart of new hub
    A new approach to prevent family harm that encourages greater collaboration across government and community groups is being celebrated at the opening of a new facility in Auckland. Prime Minister Jacinda Ardern today opened the Multi-Disciplinary Family Harm Prevention Hub Te Taanga Manawa in Lambie Road in Manukau. The facility ...
    BeehiveBy beehive.govt.nz
    1 week ago