Wednesday, September 09, 2009

Paid Parental leave would cost at least $700 million

Media Release
Wednesday, September 9, 2009

The Families Commission today called for the government to extend Paid Parental Leave from 14 weeks to 13 months. Welfare commentator Lindsay Mitchell says this move would cost New Zealand at least $672 million a year by 2013.

"Based on Treasury figures, the current scheme cost $135 million in 2008. Extending entitlement from 14 weeks to 13 months would push this cost up to $540 million. Based on Treasury's current projections, this would further increase to $672 million by 2013. Add to this the month's paid leave the Families Commission wants for fathers/partners , and the cost would rise to over $700 million."

Mitchell cautioned, however, that Treasury doesn't always get it right. "Their initial projected costings for PPL were far too conservative. In 2003 Treasury estimated PPL would cost $74 million by 2008. In fact, it climbed to almost double that figure."

The Families Commission says that most developed countries paid parental leave for at least 12 months yet according to the OECD, the average period is 18 weeks, just four more than New Zealand. "As well, many of the countries that provide longer entitlements than New Zealand do not have long-duration single parent benefits. In Sweden , for example, all parents get the same paid leave entitlement but all are expected to return to work when the entitlement ceases."

"At a time when welfare costs in other areas are rising rapidly, New Zealand simply cannot afford to follow the Families Commission recommendation."


Sus said...


If the Commissioner really is concerned about alleviating financial pressures upon parents, a simple change of press release title -- (PPL FOR BETTER ECONOMIC PERFORMANCE) -- would do the trick:

"Abolition of Families Commission for better economic performance"

Lindsay said...

Thanks Sus. I am talking to Larry Williams around 5.30 so might mention that, along with lower taxes and less regulation. Anything that is better for the individual is better for families.

Mark Hubbard said...

"At a time when welfare costs in other areas are rising rapidly, New Zealand simply cannot afford to follow the Families Commission recommendation."

No, New Zealand cannot afford the Families Commission.

Lindsay said...

Agreed, Mark. But $700 million is slightly more significant than $8 million and I wouldn't put it past National, chasing the young female vote, to run with it. They were amendable to the idea when it was last trotted out in 2007.

Anonymous said...

I haven't looked into the analysis ( yours or the commission's) but has there been anything done on benefits? The costs seem significant but are there any economic benefits?

Lindsay said...

Parenting is a 'public good' and the benefits are social. That is the FC position. I haven't seen any analysis, but there will be some economic benefits because some US companies offer PPL as a way of retaining skilled staff. If the worker is going to have a baby regardless, paying her for a period ensures her return rather than resignation. But when the leave is taxpayer funded (NZ) it acts as a subsidy to the private sector. The Families Commission also recommends continuing state funding.

Anonymous said...

Relax. It's all part of the plan. The decision's already been made; there's sweet FA you'll be able to do about it. There's only one objective still to be achieved - Sue & Cindy were happily working away on that one for a while. Care to guess which on the list is still undone ?

As part of the list of “demands” that the Sisterhood would work towards over the next thirty years, wrote Goodger, were:

* Abortion to be free and on demand
* Sex education and birth control integrated into the education system at all levels and read-ily accessible through government-financed clinics. The government should initiate a public education campaign to overcome ignorance,
fears and illusions…
* An end to coercive family laws
* De facto marriage should be considered to have the same status, legally and socially, as marriage by legal contract
* ‘The rearing, social welfare and education of children should become the responsibility of society, rather than individual parents…All
laws enforcing individual ownership of children should be abolished.
* All discrimination against homosexual men and women should be outlawed…laws should be repealed’
* All laws victimizing prostitutes should be abolished
* Paid maternity leave of 12 weeks with no loss of job or seniority should be available
* The government should provide the finance for free child-care centres open to all children from early infancy for 24 hours a day

“Our goal must be to create economic and social institutions that are superior to the
present family institution.”

The circle is nearly complete. The transformation of our society will be done & dusted in about 20 years.

libertyscott said...

Surely the best thing about abolishing the Families Commission would be watching Peter Dunne have a little hissy fit about it, and being dared by John Key to pull his support for the government.

The only families the Families Commission has benefited are the ones of its employees.