Government vetoes paid parental leave extension

The government has vetoed a bill that would have extended paid parental leave from 18 to 26 weeks.

Finance Minister Bill English has vetoed Labour MP Sue Moroney’s private member's bill, before its third reading, which had support from the Greens, NZ First, the Maori Party and United Future.

“The Treasury estimates the cost of this legislation amounts to $278 million over the next four years, a significant extra – unbudgeted – cost,” Mr English says in a statement.

“That’s on top of the $251 million a year (net of tax) taxpayers are expected to spend by 2020 under the existing paid parental leave framework.

The government can exercise a financial veto if it decides a bill will have more than a minor fiscal impact if it were to be passed into law.

“The government has recently extended paid parental leave from 14 to 18 weeks, and extended eligibility, at a total annual cost of $65 million. This is an appropriate extension relative to other pressing social needs where the government has increased funding,” Mr English says.

Workplace Relations Minister Michael Woodhouse says the government will continue to develop New Zealand’s paid parental leave framework to ensure it better reflects modern-day work and family arrangements.

“In addition to the 18 weeks extension, more workers will now be eligible for parental leave payments, eligible parents of pre-term babies will be entitled to a longer period of payments than the standard 18 weeks and workers will be able to take parental leave more flexibly, if it works for them and their employer,” he says.

In May, Ms Moroney said public support is growing for extending paid parental leave, citing 6755 public submissions, 99% of which were in favour.

“National is increasingly arrogant and out of touch and it’s time it started listening,” she said.

“Even when National wrongly inflated the cost of increasing paid parental leave to $500 million, 62% of New Zealanders still said it should be funded.”

She said the bill’s cost would have been $78 million a year when immediate cost savings are factored in and $12 million would have been needed in the government budget to implement the first four additional weeks Labour is proposing from April next year.

Ms Moroney said this is a tiny proportion of the $1 billion of new spending in the budget and does not justify a financial veto.

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