Government puts off paid leave for parents

By VERNON SMALL

Paid parental leave has been delayed by three months as the Government frets about the impact of a slowing economy on its accounts.

Details of the scheme will be released tomorrow but it is understood the starting date will be put off from April to July next year.

The Prime Minister had no sympathy yesterday for any couples who planned to have a baby in April on the basis of the Coalition's previous pledge.

"Someone who decided to conceive on the basis of a politician's press statement would be a little unwise," Helen Clark said.

The Government is expected to announce it will pay a parent for 12 weeks' postnatal leave, the amount based on a percentage of the average female weekly wage.

It is understood that Finance Minister Michael Cullen pressed for an even later start, October 1, to keep the cost to next year's Budget as low as possible, fearing a slowing world economy will cut Government income.

That was rejected because it would take the implementation date too close to the election, likely to be next November.

The package is expected to cost more than $40 million a year.

A further $20 million is earmarked for the existing parental tax credit, which gives low- and middle-income working families up to $150 a week for eight weeks.

If the paid leave entitlement is set at 65 per cent of the average female wage it could be as high as $245 a week.

Helen Clark said the Government wanted to iron out any administrative problems and ensure there would be no double-dipping where the tax credit and paid leave overlapped.

Each year 28,000 working mothers, including casual workers and the self-employed, have children.

But if the same criteria are applied to paid parental leave as are used for unpaid leave under the Parental Leave and Employment Protection Act, only 19,000 would qualify.

Helen Clark said the scheme was a significant social policy advance.

The decision on paid leave marks a victory for the Alliance before its annual conference in Auckland next weekend.

The Alliance had campaigned for 12 weeks' leave financed by a levy on employers but paid at a much higher rate.

Labour's policy was for six weeks' paid parental leave paid for by taxpayers.

Meanwhile, the Prime Minister came under fire yesterday for ruling out a fourth week of annual leave in this parliamentary term.

Engineering, Printing and Manufacturing Union secretary Andrew Little said: "New Zealand is way behind other developed countries when it comes to annual holidays.

"The Austrians get six weeks, the Germans, French and Swedes get five. Even the Aussies and the British get at least four weeks."

He said an extra week's leave would cost the country $350 million a year, or 0.3 per cent of gross domestic product.

Helen Clark said there was a limit to what could be achieved in one three-year term.

But she said that Labour would look at adding a fourth week as part of its policy for the next election.