Labour is calling on the Government to withdraw its threat of vetoing proposals to extend paid parental leave after official advice put the cost at $334 million less than estimates by Finance Minister Bill English.
The member's bill by Labour MP Sue Moroney would gradually extend paid parental leave over three years from 14 weeks to 26 weeks. It is being considered by a select committee.
When the bill was introduced to Parliament in April, English estimated it would cost $500m over three years, sparking the Government to say it would use its powers of financial veto to ensure it failed.
However, the select committee was told today by the Ministry of Business, Innovation and Employment the cost was $166m over three years.
Moroney said the Government should withdraw its plans to veto the bill "until it can get its figures straight".
"The Government cannot continue to keep a financial veto in place that it put in place based on shonky figures."
On the day English threatened to use the veto, he was given official advice by the then Department of Labour the cost was around $285m over three years, she said.
"I can only imagine he made a decision to inflate the official figures he was given."
Asked if the Finance Minister had made up his estimate, Moroney replied: "It looks very much like that."
Moroney said the ministry's figure was likely to come down further because it hadn't taken into account the fact the bill would come into effect in the month of April, not the start of the financial year, and there would be reduced use of early childcare centres which would cut government subsidy costs.
"So the figures we are working with are still inflated."
The select committee needed to establish the actual cost, she said.
"I'm sure by the time the select committee finishes its work it will be clear to all New Zealanders just how much more affordable paid parental leave is."
Labour says extending paid parental leave to six months would: improve child health by increasing the time babies were breastfed for; strengthen the bond between children and parents which was proven to reduce spending in the justice and health sectors; create more job opportunities for the unemployed; and increase workforce productivity.
"The business case is very strong for this," Moroney told the select committee. "This is one of the wisest investments any government can make."
- © Fairfax NZ News
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