Labour says the Government's plans to use a rare veto tool to quash a bill to extend paid parental leave is "undemocratic".
Labour wants to extend paid parental leave from 14 to 26 weeks.
The first stage of the bill has the support of the Greens, Mana and United Future, and potential backing from the Maori Party and New Zealand First.
But acting Prime Minister Bill English said this afternoon the proposal is unaffordable and if it gets to its third reading, the Government will veto it.
ONE News political reporter Jessica Mutch says the bill's sponsor, Labour's early childhood spokesperson Sue Moroney, is "shocked" by the development.
"She said it's hugely undemocratic by the Government and that they're simply trying to shut down debate on this issue," Mutch said, quoting Moroney.
Green Party co-leader Metiria Turei also said the move was undemocratic and that it sends a message that the Government "doesn't care" about mothers and babies.
"By vetoing the bill they've made a clear statement that they do not care about the bonding process between a mother and a child or the importance of encouraging six months exclusive breastfeeding as recommended by the World Health Organisation," Turei said.
"Extending paid parental leave gives parents the option to stay
at home with their children longer, if they feel that's what is
best for their children. It should be a parent's choice. But
National clearly thinks it's theirs.
English said the bill is unaffordable when the country is still in deficit.
"I'm a bit surprised that, not having heard much from the Labour Party all year, their first proposition is to go and borrow an extra half a billion dollars over the next four years," he told media today.
Each year 26,000 families get parental leave and the current allowance of 14 weeks costs more than $150 million annually.
Increasing the period to 26 weeks is expected to nearly double the cost and Business New Zealand Chief Executive Phil O'Reilly said the added cost needs serious consideration.
"Most employers would support the idea of more paid parental leave if it were affordable, and that's the question we've all got to ask ourselves," he said.
"Is it affordable for us in New Zealand right now to be looking down the barrel of spending an extra $150 million?"
Moroney said despite the current economic climate, New Zealand can afford the extended period because it is structured so it increases by four weeks at a time over three years.
"The major impact of this would come in the very same year that the Government said it is going to be back into surplus anyway," she said.
'Shifting money around'
Moroney believes New Zealand should look at how Australia increased its paid parental leave from zero to 18 weeks in the midst of an economic depression in January last year.
Moroney said employers will not be hit in the pocket from the proposal because the money will come in part from the taxpayer, but also from shifting money around that is currently used for childcare elsewhere.
"The taxpayer actually subsidises employers to make sure that they don't lose their talented staff that they have invested a lot of time and energy in," she said.
"The Government currently pays subsidies for childcare."
"Why can't we use that amount of money and give that to the parents so they can be at home with their child?"
O'Reilly believed the proposal should be planned for when the economy is stronger.