Increased paid parental leave doesn't look likely

A bid to extend paid parental leave to 26 weeks has passed another hurdle. Photo: iStock

Labour MP Sue Moroney's bid to extend paid parental leave to 26 weeks has passed another hurdle tonight.

However, the legislation will not become law, even with the support to pass its third and final reading.

A spokeswoman for Finance Minister Bill English confirmed he would invoke a financial veto.

Ms Moroney's bid to extend parental leave to 26 weeks passed its second reading 61-60 votes tonight, after support from New Zealand First, the Green Party, the Maori Party and United Future.

The Government last year increased paid parental leave from 14 to 16 weeks. A further lift to 18 weeks kicked-in on April 1.

Mr English has refused to comment on speculation tomorrow's Budget could contain further extensions to paid parental leave.

Ms Moroney said any increase less than 24 weeks would be "short-changing families".

"National needs to get with the programme and ensure the funding is made available to carry out the will of Parliament."

Ms Moroney's Bill proposed an increase to 22 weeks next year, and to 26 weeks in 2018.

She has said extending paid leave to 26 weeks would cost an extra $107 million a year, but it would also save $28 million a year in childcare subsidies, reduced unemployment benefits, reduced health costs and higher taxes.

After Ms Moroney's Bill passed its second reading, United Future leader Peter Dunne called for an eventual extension to a year of paid parental leave.

United Future's policy is to phase in a year of paid parental leave over a five year period.

"The first year is crucial to a child's development and being able to have more time bonding with their parents is vitally important for developing a child's communication, language and health," Mr Dunne said.