'Middle-class welfare' cops flak

21:26, Jan 27 2014

Young women may find it harder to get work at small businesses if paid parental leave is extended to 26 weeks, according to the New Zealand Initiative executive director Oliver Hartwich.

Labour leader David Cunliffe said yesterday in his state of the nation speech that a Labour-led Government would extend paid parental leave from 14 to 26 weeks.

Hartwich said the policy is largely "middle class welfare" which would place an "enormous burden" on smaller businesses.

"It might even lead to some businesses being more careful about taking younger women on because they might fear that eventually that [26 weeks paid parental leave] might happen.

"It wouldn't be legal to discriminate on these grounds but it doesn't make it any easier for small businesses. It isn't a reason I would reject it but it is probably going in the wrong direction."

High-profile employment lawyer Susan Hornsby-Geluk said the duration of paid parental leave was largely a matter for the government.


"It doesn't directly impact on employers except to the extent that employees may choose to be away from the workplace longer.

"Given that they've already got a statutory right to be away for up to 52 weeks, extending the paid leave period to 26 weeks probably wouldn't make a significant difference.

"It would only make a difference to those workers who can't afford to be out of the workplace for any longer than the period for which they get the government subsidy," Hornsby-Geluk said.

Labour MP Sue Moroney's paid parental leave bill was drawn almost two years ago to go before Parliament but the Government threatened to veto the bill even if it passed a vote in the House, saying it was unaffordable.

It has been reported the Government has done a u-turn on using a financial veto, which could see parents start receiving six months of paid parental leave as early as July.

However, if Moroney's bill did not pass in the House, it would be resurrected by Labour if it is in power after this year's election.

One award-winning business woman warned that six months paid parental leave could push some small companies under.

Christchurch's NZ Tax Refunds founder and chief executive Cilla Hegarty said she agreed mothers or fathers needed to be at home in the formative first six months.

But some small employers would be stretched if a key employee took six months leave especially when 97 per cent of businesses had fewer than five employees.

"You take one of those away for 6 months - it is really, really hard for them," Hegarty said.

"It would put some businesses under," she said.

Getting a temporary staff member for 14 weeks was easier than for 6 months, she said.

Another leading Christchurch business woman Snowy Peak founder Peri Drysdale supports Labour's proposal to extend paid parental leave to 26 weeks.

Even though it could lead to disruptions for businesses, it would be best for mothers and children, Drysdale, founder of the specialist clothing manufacturer, said. The leave is paid for by the Government, not employers.

Drysdale, a mother and grandmother of two, said she had a lot of staff with young children.

"It's expensive to retrain someone and it's hard to recruit for a short period of time. Sometimes it is just easier to wait for the person to come back."

"On the plus side, having an income for longer is better for the infant."

However, Drysdale criticised the $60 a week payment as "a waste of money".

"The money alone isn't going to help the bottom 25 per cent of our children in poverty to get to school fed and with shoes on. If you give families that extra money, it will likely not end up where it needs to.

"What we're lacking at that level is parental, budgeting and life skills, " Drysdale said.

She said she would rather the money was spent on teaching parental and budgeting skills to parents, or helping children to become more self-sufficient.

"I'd like to see the money go into initiatives such as gardening and cooking produce in the school," Drysdale said.

Hegarty backs the idea of support for families but is not convinced Labour's proposal is the right way to do that.

"I absolutely and utterly agree with the fact that New Zealand as whole needs to bring up all these children. The concept of the village bringing up the children is right."

"Is this the right way of going about it? I'm not absolutely sure," Hegarty said.

"I do believe we need to support families more than what is done. I just wonder if it is well thought out. Where does this money come from."

Providing infant formula and nappies might be better than providing money. But providing free antenatal classes was fantastic, Hegarty said.

Canterbury Employers' Chamber of Commerce (CECC) chief executive Peter Townsend said employees had the right to take up to a year off on parental leave. If the paid part of that was extended to 26 weeks, "it doesn't make a big difference to the employer."

He said replacing women for a longer period of time might be an inconvenience for employers, but it was part of "good employment practice".

It was for the taxpayer to decide about the proposed policy and to understand it was going to cost them more money.

Fairfax Media