The Families Commission has reversed its support for a full year of paid parental leave, saying the country can probably no longer afford it.

The move has dismayed social campaigner and Mana candidate Sue Bradford, who accused Families Commissioner Carl Davidson of betraying the ideals of his office and called on him to resign.

Mr Davidson made his comments this week as Finance Minister Bill English announced that the Government would veto a $150 million-a-year Labour proposal for six months' paid parental leave, which appeared to have majority support in Parliament.

Until recently the Families Commission has helped lead the campaign for increased paid parental leave. It argued strongly under its former boss Rajen Prasad - now a Labour MP - for a full year's paid parental leave and reaffirmed its position in 2010.

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But Mr Davidson, appointed that year by Social Development Minister Paula Bennett, told the Weekend Herald that the commission's 2007 proposal should now be seen as "the gold standard", which had to change because of the worldwide economic recession.

He said paid parental leave encouraged people to start families, which was socially and economically desirable but had certain limits.

"We don't want to get too carried away of course because that argument could be extended to infinity.

"I mean, wouldn't it be great if none of us had to go to work and we could just stay at home and raise our kids and get paid for it?

"That's not realistic and there's a whole lot of people in work who have to juggle the demands of work and the demands of parenting."

Mr Davidson also questioned the argument, previously made by his own organisation, that New Zealand's 14 weeks of paid leave, capped at $458.82 a week before tax, is one of the least generous systems in the developed world.

"When you compare them to other countries, for instance the United States, actually our state-supplied parental leave system is a very generous one.

"And I'm not seeing lots of Americans flocking here to take advantage of our paid parental leave."

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He said there were still strong economic benefits in having paid parental leave, such as keeping women engaged in the workforce, which was a strong driver of economic growth.

"So it's in the country's interests as well to make sure that women can discharge their parenting responsibilities in that early period ... so they can go back and be economically productive once ... those early weeks of child-raising are done."

Ms Bradford said she was shocked at Mr Davidson's comments, which betrayed the strong principles the commission had previously stood for.

"Really what he's saying is ... that all that matters is the imperative to get out into the workforce even when you have a little baby, which of course is the driver behind the welfare reforms.

"It's the idea that every mother, even of very young babies, should get back to work as soon as possible.

"As if the value of parenting and bringing up your babies and children well isn't equally, if not more, important than being in the paid workforce," she said.

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Former Families Commissioner Jan Pryor, a director of Victoria University's Roy McKenzie Centre for the study of families, said the social and emotional benefits of six months' parental leave were a "no-brainer" but she suspected the economic benefits would also stack up.

"I don't think anyone's arguing that parents should be paid to stay home and raise their kids forever ...

"But my guess is the cost-benefit (of six months' paid parental leave) in terms of children's well-being and families getting settled, would be in favour of doing it."