Paid parental leave

Hamish Rutherford at Stuff reports:

Prime Minister John Key says parents will have to wait until at least 2015 before the Government considers extending paid parental leave, because it cannot afford to do it now.

A One News-Colmar Brunton poll released yesterday showed 62 per cent of voters back a law sponsored by Labour MP Sue Moroney that would extend taxpayer-funded paid parental leave from 14 weeks to 26 weeks.

The law change also appears to have enough support in Parliament to pass, but the Government has signalled it will use its veto power, which it can if a law would have a significant impact on the Budget.

Today Key said bill would be blocked because of cost, which the Government estimates at $150 million a year, but said the leave would likely be extended eventually.

“I think paid parental leave will increase one day, it’s just not today, because we just don’t have the money,” he said.

“No one’s arguing it’s unreasonable but it’s all about affordability.”

If the Government was to extend paid parental leave it would mean abandoning its target of reaching a fiscal surplus by 2014-15, or cutting spending elsewhere, Key told TVNZ’s Breakfast.

This is why the Government has a financial veto – granted to it by Parliament. If the Government has no control over expenditure, then it isn’t governing.

Supporters of the bill dispute the Government’s estimates of the cost of the law change.

Rebecca Matthews, spokeswoman for lobby group 26 for Babies, said she understood the cost of the change would be $166 million over three years, which the select committee hearing submissions on the issue had said was within the margin or error of the Government’s forecasting.

That cost is misleading, as it covers the transition period. Once fully implemented the cost is around $150 million a year. When we are still struggling to get out of deficit, it is too large a commitment.