Hon Bill English
Minister of Finance
Hon Michael Woodhouse
Minister of Workplace Relations

16 June 2016 Media Statement

Govt veto’s paid parental leave bill

Finance Minister Bill English has today vetoed proposed changes to paid parental leave.

Mr English has exercised his powers of Financial Veto ahead of the third reading of the Parental Leave and Employment Protection (Six Months’ Paid Leave and Work Contact Hours) Amendment Bill.

“Treasury estimates the cost of this legislation amounts to $278 million over the next four years, a significant extra - unbudgeted - cost.

“That’s on top of the $251 million a year (net of tax) taxpayers are expected to spend by 2020 under the existing paid parental leave framework.

“The financial veto is intended to enable predictable financial management of public finances.

“The Government has recently extended paid parental leave from 14 to 18 weeks, and extended eligibility, at a total annual cost of $65 million. This is an appropriate extension relative to other pressing social needs where the Government has increased funding,” he says.

Workplace Relations Minister Michael Woodhouse says the Government will continue to develop New Zealand’s paid parental leave framework to ensure it better reflects modern-day work and family arrangements.

“From 1 April 2016, we made paid parental leave more modern, more flexible and more practical to ensure more parents and carers get as much time with their young children as possible, which will help to improve outcomes for families and children while being fiscally responsible and recognising current economic conditions.

“In addition to the 18 weeks extension, more workers will now be eligible for parental leave payments, eligible parents of pre-term babies will be entitled to a longer period of payments than the standard 18 weeks and workers will be able to take parental leave more flexibly, if it works for them and their employer,” he says.

In addition to extending paid parental leave, the Government is providing extensive support for families in other areas, including free doctors’ visits and prescriptions for children under 13 and the first increase in benefit rates for families with children since the early 1970s.

Under standing orders, the Government can exercise a financial veto if it decides a bill will have more than a minor fiscal impact if it were to become a law.

There are 32 clauses in the Bill and the financial veto is particularly in response to clauses 15 and 29, which propose to extend paid parental leave to 22 weeks by April next year, and 26 weeks (six months) by April 2018.

Veto_Certificate.pdf

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