Paid parental leave bill going nowhere

A parliamentary select committee has been unable to make a decision about whether a bill extending paid parental leave should be passed into law.

At the moment, the law provides for 14 weeks of paid parental leave. A private member's bill in the name of Labour MP Sue Moroney extends that to 26 weeks.

The committee says 99.6 percent of the 3809 submissions it received support the proposed law change.

But its report, released on Friday morning, says it cannot reach agreement on whether the bill should proceed.

Ms Moroney says she's disappointed that National Party MPs on the committee voted against the bill going ahead - "despite the fact that there's been months and months, in fact almost two years, of work go in at select committee to finding out the true figures on that bill."

The committee says in its report that the cost of implementing the change over three years would be an additional $276 million, then $138 million a year after that.

The Government last year threatened to use its financial veto to stop the bill, although at the end of the year it asked for the report back on the legislation to be delayed while it reconsidered its position.

It has since signalled that it is working on its own policy to extend paid parental leave, and Prime Minister John Key said on Friday that the Government is still likely to use its veto to scupper the bill.

Mr Key says extending the leave to 26 weeks is simply not affordable. "If you consider that against all the range of other initiatives that government might want to fund," he says, "we don't believe the Labour Party can do that without raising taxes or borrowing more money, but in the end we'll make our own announcements in the fullness of time."

Mr Key says the annual cost of the scheme is already $170 million and Labour's proposal would add $138 million to that.

Despite the deadlock, the bill will still go back to the House for its second reading.