Crunch time for doubling paid parental leave

Last updated 05:00 03/03/2014
HUGE COMFORT: Shomi Yoon and her daughter, Asuka, enjoy their time together. Yoon appreciates the benefits which paid parental leave gave her.

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After her first child, freelance translator Shomi Yoon was glad that she had three months' paid parental leave to help cushion the drop to one income.

It allowed her to focus on her baby, not on the high cost of living in Wellington or the raft of first-time baby expenses she faced.

"As soon as I got pregnant, for the whole nine months you're trying to map out every moment of your post-partum life and not having to, for that initial three months, think about where's the pay going to come from or how we were going to cope with one income, was a huge comfort for me," she says.

So a proposal working its way through Parliament to almost double paid parental leave to six months is good news to Yoon.

"If I think about my own experience, I had real trouble breastfeeding and I was really only getting the handle on it at about three months."

For women like her who took longer to recover, "not having to think about potentially going back into work after three months will be huge".

It is hard to find anyone, even in business, who disagrees strongly with the notion of extending paid parental leave. But the government says the private member's bill being pressed by Labour's Sue Moroney will cost money it can't spare.

Moroney's bill to lengthen paid parental leave from 14 to 26 weeks would be introduced in four-week chunks over three years. By year three, the additional costs would be $138 million a year, offset by about $28m in early childhood subsidy and other savings, and well under previous estimates.

The bill, which has its second reading this month, is believed to have a one-vote majority. If all goes well, it would come into effect in July but the government retains the rights to veto the bill on budgetary grounds before it reaches its third reading.

"We're now at the crunch time where the government has to come clean and stop playing political games on this issue and give families some certainty around whether they're going to get extended paid parental leave.

"I'm hearing frequently from women who are saying, ‘look my baby's due on July 9 - when's your bill going to come in'?"

The cost of Moroney's proposal is considered modest in some quarters but more recently it was rolled into Labour's "Best Start", an election policy aimed at combating child poverty, which would cost upwards of half a billion dollars annually.

The package announced in January includes a "baby bonus" for most parents of newborns and an extra five hours a week of early childhood education.

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While it's difficult to say how much traction Best Start will have with voters, paid parental leave has plenty of support.

"There is a cost to business, of course, and that's the cost of the employee being away and inevitably there's a disruption to the business and potentially productivity lost," says Business New Zealand chief executive Phil O'Reilly.

"But most businesses are very happy to bear that and to work with it, because they understand the wider social context. And also, of course, if they work well with that employee while they're away on parental leave, be they man or woman, then they're more likely to get them back."

In fact, O'Reilly - who sat on an advisory panel on child poverty last year - believes the discussion should really be a wider one about parents and workplace support.

"We have a rather binary debate going on in New Zealand saying the way to do this is through paid parental leave. Actually, what companies are doing a lot more of is not just that, but also trying to think about childcare.

"They're trying to think about maintaining connections between those mums and dads taking time off and their workplace while they're on leave. Because that's often an issue, so people tend to become disconnected from their workplace and that will impact [on] their propensity to return to work."

At the small business end of things is Allan Probert, a vet clinic owner in Wellington, who has 23 staff, all but two of them female.

He does not begrudge parental leave but admits losing valuable skill sets can be awkward and locums are expensive. "If you have a couple of staff at the same time going through that situation then I would think it would cause some real issues for them."

However, Canterbury Chamber of Commerce chief executive Peter Townsend says it's similar to covering for illness or holiday leave.

"I know it's harder for a small business than for a bigger business but most businesses can adopt some form of flexibility in the workplace, and that means you do have some form of give and take when someone goes on parental leave."

Townsend says the 26 weeks proposal won't bother most employers as most mothers stay off work for longer than three months.

"The only difference from an employer perspective is that the government [may] pay a bigger lump of that now. That is an issue for the voting public."

A quick look at the statistics shows that attitudes towards parental leave in many countries are mellowing. Almost all industrialised countries have legislated maternity leave, if not paternity leave, and many offer at least three months' paid support.

Eastern Europe and Scandinavian countries are among the most generous, with three years of state assistance in Slovakia, and up to 16 months' paid leave in Sweden. British workers are entitled to up a year off, with 39 weeks paid. In Australia, it's 18 weeks paid. At the other extreme is the US, where "family and medical leave" of 12 weeks is often unpaid and covers only about 60 per cent of workers.

In the OECD, New Zealand ranks just above America, according to 26 for Babies, a collective of unions, parent and health groups supporting Moroney's bill.

"We have in front of us a bill which would take New Zealand more into the middle of the pack internationally rather than being at the bottom," says the group's convener Rebecca Matthews.

"It's relatively affordable and has broad public and political support. So it's kind of like, what's wrong with that picture?"

The theory around paid parental leave and other family-friendly concessions is that it is good for business because it cultivates higher job satisfaction, worker loyalty and greater productivity.

That's even more pertinent as a skills shortage nips at employers' heels, says Matthew Love-Smith, general manager of recruitment firm Manpower New Zealand.

Every company needs a talent strategy which includes part-time and flexible workers to take over when parents go on leave. Good leave strategies can give companies the edge, he says.

"It will not only help retain your staff, but will help to attract others. Female workers looking to return to the workforce, even part-time, are an under-resourced talent pool."


Mothers who met the hours test and have been in their job for at least a year get 10 days special leave, up to 14 weeks paid maternity leave and up to 52 weeks in unpaid extended leave. There are provisions for partners, adopting a child under six and self-employed workers. Mothers who have been in their job for at least six, but not 12, months can get paid parental leave but not extended leave. Mothers who have been employed for less than six months or do not otherwise meet the minimum hours of work test are not entitled to the leave.

- The Press

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