Paid parental leave to grow, but not to 26 weeks

The bill is likely to have the numbers to pass but the Govt plans to veto it as it says giving parents 12 extra weeks of paid leave is unaffordable. Photo / Thinkstock

After stalemate on select committee, National says extra 12 weeks unaffordable

Families are all but certain to get more paid parental leave in this year's Budget, but not 26 weeks as proposed in a Labour bill.

National reaffirmed its opposition to Labour MP Sue Moroney's proposal to increase the entitlement from 14 to 26 weeks after a parliamentary committee reported back on her legislation yesterday.

The three National MPs and three Opposition MPs on the select committee could not agree on whether it should pass into law. The bill is likely to have the numbers to pass but the Government plans to veto it because it says giving parents 12 extra weeks of paid leave is unaffordable.

Prime Minister John Key indicated there will be an increase in the May Budget, but it will not match the Labour proposal.

"We're working our way through it, in terms of Budget bids. Twenty-six weeks is not affordable, but we do think some extension might be."

New Zealand's paid parental leave is among the lowest in the OECD, and is similar to entitlements in nations such as Algeria and Malta.

Australia gives mothers 18 weeks, and Prime Minister Tony Abbott is planning to expand the scheme next year to 26 weeks.

Parent advocacy groups in New Zealand urged MPs to support Ms Moroney's bill yesterday. A coalition of health organisations and lobby groups called 26 for Babies said new costings showed extending paid leave was significantly more affordable than the Government believed.

Finance Minister Bill English contested this, saying Labour had based estimates on the initial cost of rolling out the scheme, not the cost once it was fully implemented. He said it would require the Government to borrow $500 million over four years.

Treasury advice to the committee showed once Ms Moroney's bill was fully implemented, it would cost an additional $138 million a year.

It would also make savings of at least $28 million because of reductions in tax, welfare payments and childcare subsidies.

Mr English said a Government proposal would be affordable and fair, and would keep in mind the fact that only 40 per cent of families who had babies took paid leave.

In December, National requested a later deadline for the select committee's report on the bill to give the party time to reconsider its position.

But the committee came back with no amendments yesterday, prompting Ms Moroney to accuse National of delaying tactics.

"I agreed to that extension in good faith, but National members introduced no amendments and then voted down the work the select committee had done," she said.

Of the 3,809 submissions to the committee, 99.6 per cent wanted paid leave extended to 26 weeks. If the bill was accepted, parental leave would be extended by four weeks each year over three years.