Key confirms Government considering extending parental leave, although not as long as Labour plans

By Bernard Hickey

In another sign that purse strings are loosening on both sides of Parliament ahead of the General Election later in 2014, Prime Minister John Key has confirmed the Government is considering agreeing to an extension of paid parental leave.

Labour Leader David Cunliffe yesterday announced Labour's 'Best Start' package of baby bonuses, early childhood education and an extension of paid parental leave from 14 weeks to 26 weeks. Labour estimated the cost of the extension of paid parental leave at up to NZ$125 million by 2020/21.

This is the proposal in Labour MP and Social Development Spokeswoman Sue Moroney's private member's bill, which the Government initially rejected as too expensive last year. The Government indicated privately to Moroney just prior to Christmas that it was dropping its blanket opposition to the bill and was open to discussions. The bill is reported back to the select committee for further consideration on February 28.

But Key and Finance Minister Bill English told reporters before the first National Parliamentary caucus meeting of the year that an extension was now being considered.

Key said the Government could not extend to the full 26 weeks.

"I'm not saying its not important and I am not saying there couldn't be some modest expansion, but do we want that at the expense of more money going to cancer drusg, potentially more police officers, more money spent on improving our education system. There's got to be a balance here," Key said.

He agreed a smaller extension was possible.

"It may do and we are working on our own policies, and you are aware there is a members' bill and there have been some discussions there but not to the level of largesse that we saw announced yesterday from Labour," Key said.

"We have our own policies," he said, adding reporters would have to wait for National's full policy.

"It is likely there will be a change, but not to 26 weeks. You have to wait."

English said later the Government could still veto the Moroney private member's bill and suggested that National might propose a different way to help poorer young families. "When that bill was introduced we felt the costs were far too high. At the time we had significant deficits, but there's a bit more confidence now," English said.

"We would be balancing those discussions up with what we believe would be a more effective way of reaching the most vulnerable children because many of our most vulnerable children are not in households that would qualify for extension of paid parental leave," English said.

"In fact only about 60% of households with newborns qualify for paid parental leave. A significant minority don't qualify," he said.

Key rejects Labour and Green plans

Meanwhile, Key said voters should consider the likely tax increases and higher government debt that would come with the Labour 'Best Start' policy and Green's NZ$115.1 million policy of putting Community Hubs in low decile schools.

"I think for a lot of NZers who might have initially looked at the programmes and thought 'there might be something in it for me', there won't be anything in it for them because the bit that David Cunliffe's not telling them is that taxes are going up to pay for this so for a lot of higher income earners they will get something from the baby bonus, but of course they will pay a lot more in higher taxes, and they will pay higher taxes forever so for a lot of people it could be fool's gold," Key said.

Key said the Government had not made any additional discretionary spending in the first four years and had only last year increased that 'discretionary' extra spending to NZ$1 billion per year.

"This is a Labour Green coalition that would spend another 3/4 billion and we are only at the end of January," he said.

Moroney comments

Moroney told reporters before Labour's first Parliamentary caucus meeting of the year National had told her before Christmas any Government proposal on parental leave would be incorporated in her bill. Any move outside of the bill would be seeing as playing politics, she said.

"They can do it right now. It can start from 1 July this year, so if they want to play politics and put it back for reasons to do with the election, then families won't feel very pleased about being used as political fodder," she said.