Extending paid parental leave 'not top priority' despite discrepancy in costings

Finance Minister Bill English will not budge on his plan to veto a bill extending paid parental leave from 14 weeks to six months, even if the estimated costings are less than first calculated, he said last night.

"This is a desirable policy but it's not our top priority," he said.

Mr English said he was not prepared to borrow more to fund it when the Government had already borrowed to increase Working for Families by 5 per cent on April 1 this year in a cost-of-living adjustment.

The top priority for families had been maintaining income support and increasing early childhood education.


"Any extra spending we incur now is funded by debt and so we have to be very clear about those priorities if we are going to incur more debt."

The Parental Leave and Employment Protection (Six Months' Paid Leave) Amendment Bill is sponsored by Labour list MP Sue Moroney.

The payments, of up to $475 a week, would remain but it would be phased in by four weeks a year over three years.

Ms Moroney agreed yesterday that deciding whether to fund paid parental leave was a matter of priorities but said it would be of greater benefit than $1.76 billion being spent on the Puhoi to Wellsford highway.

The week the bill was drawn from the ballot Mr English gave notice he would exercise his financial veto on it to prevent it being passed into law. He has estimated the cost to be an extra $450 million over its first four years, or $300 million over three years, vastly different from a new figure of $166 million extra for three years estimated by Infometrics in work commissioned by the Ministry of Business, Innovation and Employment.

The discrepancy emerged at the select committee yesterday considering the bill when MBIE officials appeared before it in private. The gap had narrowed somewhat by the end of the day. Both estimate that the extra cost annually when fully implemented would be $150 million and $145 million respectively.

Sue Moroney hoped the committee would take into account issues including:

* Reduced subsidy the Government would be spending on childcare subsidies of up to $12.09 an hour.


* Income tax paid from paid parental leave.

* The fact that some state-sector employees are paid for more than 14 weeks.

* Savings on hospital admission by babies, with breastfeeding rates increased.