New Zealand had one of the lowest rates of parental leave in the OECD, and research had found financial pressures were driving people back to work before they were ready.
"We encourage all political parties to find a way to ensure that paid parental leave is extended, and to avoid what we think will be the unsightly spectacle of the Government exercising a financial veto against our nation's smallest citizens."
Public Service Association policy adviser Kirsten Windelov said the workforce and society had changed significantly over past decades and extending paid leave was overdue.
New Zealand had the world's second-highest rate of women in the labour force but more support needed to be put in place for parents.
Breastfeeding Authority executive officer Julie Stufkens said more leave would help increase New Zealand's breastfeeding rate. Some 84 per cent of mothers breastfed at birth, but that rate dropped to 16 per cent at three months.
She said breastfeeding was linked with lower rates of infection, respiratory problems and infant death, and the health cost savings were ongoing.
Midwife Joy Wadham said the pressure of returning to work meant many women gave up breastfeeding earlier.
She said extending paid leave would lead to savings in the health sector.
Mother of three Evelyn Moody told the committee that as her household's primary income earner, she could not afford to take paid parental leave, so she had to return to work when her babies were aged between 6 and 7 weeks.
Her partner took paid leave instead, but that was a struggle because his employer put up barriers.
"It really was a difficult period. We believe we did the best thing we could do for our children in our situation, but having the ability to stay at home for longer - whether it was myself or my partner - would make a significant difference."
Ms Moody said returning to work at six weeks did have an impact on her productivity.
Retailers Association chief executive John Albertson, one of only a handful of submitters to raise concerns with the bill, said parents currently had to indicate they would return to work in order to qualify for paid leave, even if they had no intention of returning.
He said that was tough on employers and forced parents to lie, and it would be better if all parents qualified regardless of indicating their intention to return to work.
The association's employment adviser, Roy Hanrahan, said that under the current law employees with less than a year's service who took paid leave had their jobs protected for 14 weeks.
However, the bill had not updated that period - which meant parents who took the full six months could lose their jobs after 14 weeks.
Speaking to parents before the select committee, Ms Moroney said her plan was to "embarrass the Government into lifting this financial veto.
"The majority of Parliament agree that this is a great investment."
