Costs and benefits of saying 'no'

Finance Minister Bill English's swift announcement of his intention to veto Labour MP Sue Moroney's private member's Paid Parental Leave Bill has about it the air of a decisive Government determined not to be distracted from its oft-stated goal of defeating the country's mountainous deficit. But it also carries political risk.

Ms Moroney's Bill, plucked by luck from the parliamentary well of would-be legislative initiatives, seeks to extend the benefits of paid parental leave from the current 14 weeks to 26. There are indications this would attract support from Government allies, including the Maori Party and possibly Peter Dunne, which with the Greens in favour would give the Bill a good chance of making it into law.

But even with the select committee process not yet under way, Mr English has firmly stated his opposition. Now the Government is under fire for invoking the seldom-used right of veto for impending legislation. Under Parliament's rules it is entitled to do so if it is of the view such law would impose an unacceptable financial impost - and this is the basis on which the Finance Minister made his stand.

He argues the Government would have to borrow more money to fund it. "Doubling it will cost another $150 million a year; you'd have to borrow half a billion over the next three or four years.

We're not willing to do that," he said this week.

He is right to be concerned about the cost. The Government, with a zero budget in its sights, has made a political virtue out of fiscal abstinence. It is not about to entertain promiscuous new spending measures which could threaten its entire project. Nor should it. As the mantra goes, times are tough; belts are being tightened in all sectors, particularly public, where all spending is necessarily subject to the most rigorous scrutiny.

And yet, Mr English's position could come to be adjudged as mean-spirited and premature if the costings that emerge during select committee process are significantly different from those he is using to close the door on the matter.

Ms Moroney has accused the Finance Minister of exaggerating the likely tariff. In her view, the cumulative cost was likely to be about $80 million over three years, with the 12 additional weeks being split into three four-week tranches. These would be introduced in consecutive years.

She also pointed to the need to account for tax from parental leave payments and savings from childcare subsidies, and estimated the cost for each four-week addition to be between $25 million and $28 million.

Notwithstanding the large gap between Mr English's estimates and those of Ms Moroney, there is the potential political fallout for the National Party in being seen to shun at the outset a fair hearing for legislation that appears to have support of a majority in the House. By the book it is quite within its rights, but in politics being within your rights and being "right" are not always the same thing. There are the small matters of perception and public opinion to contend with.

It might be considered arrogant of the party to have come to its view without the benefit of expert opinion and analysis; and the public, if it engages with the debate as the Bill passes through the House, may yet be persuaded the benefits of additional paid parental leave sufficiently off-set the costs.

For viewed from outside of the monetary microscope, there are advantages to having a financial cushion allowing a parent to remain with a child during the first 26 weeks of its life. It is in the first six months that child-mother or father attachment and bonding is cemented. There is considerable research to indicate that disruption to this process can lead to personality and relationship issues in later years.

Equally, in light of so much focus on child poverty, the need to address dysfunctional families, the scandalous social and financial costs of family violence and abuse, closing down one possible contribution against these societal blights before it has been properly screened, could in the long term come to be seen as unwise if Mr English's figures don't add up.

 

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