Paid parental leave to rise to 26 weeks over three years

The Labour-led government is extending paid parental leave gradually, rising to 26 weeks from the current 18 weeks by 2020.

Prime Minister Jacinda Ardern says the government will introduce legislation to Parliament on Wednesday to increase the entitlement to 22 weeks from July 1 next year.

The parental leave paid now is one of the shortest in the OECD, Ms Ardern says.

“The increased support for working families has a net cost of $325 million over the four-year forecast period, which is what we budgeted for and fits within our fiscal plan,” she says.

The prime minister says it is a bill that has been “well canvassed” in Parliament.

Labour, in opposition, attempted to get through law changes to extend paid parental leave. But even though it had support from MPs from all parties,  it was vetoed by the National government.

“That will not happen again,” Ms Ardern says.

She says the benefits of paid parental leave are well understood but its benefits have not been translated into New Zealand legislation and practice.

Ms Ardern says she “took on board” the consideration that the increase may be challenging for smaller businesses.

“I acknowledge that has an impact – but that has an impact at 14 weeks as much does at 26 weeks,” she says.

She says the biggest impact for SMEs will be temporarily replacing the staff.

But she says by signalling the increase well ahead of time, SME employers will be able to “have a plan” for when it happens.

The Council of Trade Unions (CTU) immediately welcomed the decision, saying parents and caregivers in paid work can “breathe a sigh of relief” at today’s announcement.

“Anything we can do to make the first few weeks more relaxed for families with newborns is the right move for New Zealand,” CTU Secretary Sam Huggard says.

“The evidence shows giving baby and caregivers more time at home sets them all up for better outcomes when Mum and Dad return to paid work.”