Finance Minister Bill English has put the kibosh on the hopes of parents wanting to stay at home with their newborn for 26 weeks.

On Thursday the Deputy Prime Minister 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.

Finance Minister Bill English 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. Photo: File

Labour MP Sue Moroney's private member's bill looked to extend paid leave from 18 weeks to 26 weeks, plus add provisions around work contact hours and enabling parents to return to work for a set amount of time without losing their entitlement to paid parental leave.

A fortnight ago, the bill passed its second reading - 61 votes to 60 – with Labour, Greens, Maori Party, NZ First and UnitedFuture supporting the bill, while National and ACT opposed it.

The third reading of the bill is slated to take place for later this month, but following the financial veto there will be no vote.

'Treasury estimates the cost of this legislation amounts to $278 million over the next four years, a significant extra - unbudgeted – cost,” says Bill English.

'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.”

This year the Government extended paid parental leave from 14 to 18 weeks, and extended eligibility, at a total annual cost of $65 million – an 'appropriate extension relative to other pressing social needs where the Government has increased funding,” Bill believes.

Labour MP and architect of the Parental Leave and Employment Protection (Six Months' Paid Leave and Work Contact Hours) Amendment Bill Sue Moroney. Photo: File

But Labour MP Sue Moroney says Thursday's decision by National to veto 26 weeks paid parental leave by 2018 exposes their 'contempt for the needs of children and their families”.

'They have overturned a vote made by the majority of MPs after careful scrutiny of the research, evidence and financial impact. In doing so, they have put politics ahead of people.”

Sue believes there's no justification for a financial veto when Prime Minister John Key is indicating there will be $3 billion of tax cuts in 2017.

Labour's proposal to extend paid parental leave to 22 weeks in 2017 and then to 26 weeks in 2018 has been the subject of two select committee hearings, and during this process public support for this move has grown, adds Sue.

'The weight of public support has led to majority support in Parliament – in a modern democracy that should have seen this important support for families being implemented.

'However, the Government has blocked it in several ways over the last four years simply because it's Labour's idea.

'New Zealanders will have the final right of veto on a Government that has ignored democracy and is out of touch with the pressures and demands on families,” says Sue.

Earlier this week it was intimated the Finance Minister would exercise his power to veto under Parliament's Standing Orders.

Under the 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'.

CRUEL IRONY

UntedFuture leader Peter Dunne describes Thursday's veto as ‘cruel irony'. Photo: File

UnitedFuture leader Peter Dunne says there is a cruel irony to the Government's veto of Paid Parental Leave.

He says on Wednesday the Government called for children to be placed at the heart of policy-making in their Child, Youth and Family reforms, but Thursday saw them vetoing policy which would have given children the best start in life.

'The value of Paid Parental Leave is to the working families of New Zealand who want to balance their work life with their responsibilities and duties as parents,” says Peter.

'The dividends of Paid Parental Leave are paid for through the benefits a child receives from having their parents being able to invest more time in them. The benefit of a new-born having the best start in life, the best opportunities in life and the best chance to develop in their formative years.”

UnitedFuturevoted insupport of the bill at its second reading a fortnight ago. It has also called for the bill to be extended to a full year for any parent of a child to take up.