Bill English expected to veto paid parental leave bill before third reading

Bill English maintains the law change is unaffordable. Photo / File

The Government will this week use rare veto powers to prevent paid parental leave from being extended by eight weeks.

Labour MP Sue Moroney's private member's bill, which would extend paid leave from 18 weeks to 26 weeks, has the numbers to pass into law.

It passed its second reading last month with support from the Greens, New Zealand First, the Maori Party and United Future.

Finance Minister Bill English is expected to veto the legislation early this week, before the bill's third reading can take place.

Parliament's Standing Orders allow the Government to exercise a financial veto "if, in the Government's view, the proposal would have more than a minor impact on the Crown's fiscal aggregates".

It is the first time Mr English has used the veto. He has maintained that the law change is unaffordable.

Ms Moroney believed the Government's opposition was based on politics rather than finances.

The "can't afford it" argument did not stack up, she said, because the Government had just announced $20 billion in un-costed defence spending and regularly talked about tax cuts.

Ms Moroney has estimated that extending paid leave to 26 weeks would cost an extra $107 million a year, but she says it would also save $28 million a year in childcare subsidies, reduced unemployment benefits, reduced health costs and higher taxes.

It is the latest chapter in a long-running battle between National and Labour over paid parental leave.

Ms Moroney tabled a similar bill in 2012, which passed its first reading but was later defeated in 2015, after the general election result increased National's majority.

The balance of power shifted again in 2015 when National lost the Northland seat to New Zealand First leader Winston Peters, allowing Ms Moroney to get the 61 votes required to pass legislation.

Ms Moroney said it was now clear that the only way to lift paid leave to 26 weeks was a change of government.

The National-led Government has raised paid parental leave from 14 weeks to 18 weeks, and has not ruled out further changes.

It has also extended paid leave to casual or seasonal workers and introduced additional payments for parents of premature babies.