Parental leave would close companies

21:45, Jan 29 2014
Parental leave protest
PARENTS UNITE: Parents and babies take to the streets with pushchairs and buggies to support the bill of Sue Moroney to extend paid parental leave to 26 weeks.

An award-winning business woman warns six months paid parental leave could push some small companies under.

Christchurch's NZ Tax Refunds founder and chief executive Cilla Hegarty was commenting on Labour's new "Best Start" policy announced yesterday.

The policy proposes extending paid parental leave to 26 weeks from 14 now and paying $60 a week for every newborn up to the first birthday in families with less the $150,000 a year income.

Employees now have the right to take a year's parental leave with 14 weeks of that paid. The proposed longer paid leave will encourage more parents to take that.

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 six 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 six months, she said.

Another leading Christchurch businesswoman 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.

The Press