Prime Minister Chris Hipkins has today announced paid parental leave is set to go up on July 1 by $51 a week for new parents.

It means eligible parents will see an increase in the parental leave payment from $661.12 per week to $712.17 per week, before tax.

Hipkins made the announcement in his post-Cabinet press conference, and has also indicated the Government has backed down on a condition which would have required early childhood centres to accept children only for 20 hours a week.

The expansion of the 20 hours-free scheme was one of the Budget moves aimed at helping with the rising cost of living and was to kick in from March next year.

The PM has also indicated that Meng Foon is no longer the Race Relations Commissioner.

Hipkins read out an email Foon had sent him, which began “I am resigning”.

“When somebody tells me they are resigning, I take that as a resignation letter,” Hipkins said.

Foon spoke out again this morning about a resign-or-be-sacked ultimatum for inadequate disclosure of a conflict of interest.

The PM has also asked the Minister of Health to look at the model being used for prioritising surgery - after the Herald today revealed Auckland surgeons are being required to consider a patient’s ethnicity alongside other factors when deciding who should get an operation first.

Hipkins said he wants to make sure the Government was not creating another discrimination in the way they were handling it.

Early childhood education backdown

There was a backlash from early childhood education groups who said the Government’s Budget ECE policy would be unworkable and the conditions attached to the scheme would make it hard for some to remain viable or offer the scheme.

Hipkins announced the backdown today after early childhood centres said Labour’s $1.2 billion Budget move to expand the 20 hours-free scheme to 2-year-olds risked putting them out of business.

The expansion of the scheme was to have been accompanied by a requirement that centres had to accept children even if they were only enrolling for the 20 hours-free childcare. Most centres said they made money to operate from charging for hours that children attended above the 20 hours-free scheme, as well as charging for items such as nappies.

The scheme operates by Government subsidies based on a ratio of one teacher for every 10 children.

The centres were also concerned the higher needs of 2-year-olds would require a higher staff ratio, which they could not afford under the scheme alone.

In a statement, Associate Education Minister Jo Luxon said she had met with ECE representatives since the Budget, and they had flagged that the proposed condition requiring services to offer enrolments for 20 hours only was an issue.

She said they could not consult with centres prior to the announcement because of the confidentiality of the Budget process.

“This change will still enable parents to access more affordable childcare while allowing services to retain flexibility in their enrolment practices to support their viability.”

Luxon said other funding conditions would remain, including those giving fee transparency to parents and ensuring 20 hours ECE was genuinely free. The move was one of Labour’s attempts to ease the cost of living pressures on families in the Budget and was accompanied by a 4.6 per cent increase in the 20 hours funding rates.

Hipkins said services still had to provide clarity to parents about what they were charging for, and advise the Ministry of Education of their fees schedules.

Asked why they had not consulted with the ECE sector on it, Hipkins said it was because of Budget confidentiality.

“Ultimately this is a process we go through every year where funding is allocated and then we work through the details of implementation,” Hipkins said.

Paid parental leave

Paid parental leave is set to go up on July 1 by $51 a week for new parents - and $1327 for those taking the full 26 weeks of parental leave.

Paid parental leave rates are pegged to the average wage, so would lift by 7.7 per cent, Hipkins said today.

The minimum rate for self-employed parents will increase to $227 per week - equal to 10 hours of the minimum wage for an adult worker.

Minister Priyanca Radhakrishnan said it would help a lot of families as 56,200 people received a payment in 2022.

Eligible parents can receive payments for up to 26 weeks.

The Budget will also mean that from mid-2024, new parents will receive a 3 per cent Government contribution to their KiwiSaver while on paid parental leave, provided they continue their own KiwiSaver contributions.

Race Relations Commissioner’s resignation

Hipkins has also fronted for the first time on Race Relations Commissioner Meng Foon, who spoke out again this morning about a resign or be sacked ultimatum for inadequate disclosure of a conflict of interest.

Foon has this morning questioned whether the Prime Minister’s office had leaked his impending resignation to the media on Friday – two days before he had said he would resign.

Asked this afternoon who the Race Relations Commissioner was, Hipkins said “not Meng Foon.” Hipkins read out an email Foon had sent him, which began “I am resigning.”

”When somebody tells me they are resigning, I take that as a resignation letter,” Hipkins said.

He said the advice received on it was that it was enough to be a resignation letter.

On whether Foon was treated more harshly than ministers Kiri Allan and Michael Wood, Hipkins said Wood’s did not relate to disclosure, but to the management of a conflict of interest.

“Declaring an interest and putting it on a register somewhere does not amount to managing it,” he said.

He said managing a conflict was an ongoing process.

He acknowledged Foon’s “life of service to the New Zealand public” and said he had always found him to be a thoroughly decent person. However, he had failed to manage a conflict of interest.

He said Minister Deborah Russell had responded to Foon, accepting his resignation.

On whether the PM’s office had leaked news of his resignation, Hipkins said he disagreed. “He emailed his resignation. We receiving inquiries about it and answered those.”

Foon has still not tendered his resignation and told the Herald he was still waiting to be informed by associate justice minister Deborah Russell of the grounds on which she thought he had fallen foul of the Crown Entities Act.

Russell would not comment today.

In a statement last week, she said he had not adequately declared his interest in a company which received government funding for emergency accommodation while he was taking part in a report on that issue.

Foon has also cried foul about having to resign given some MPs who have had troubles with perceived or actual conflicts of interest have not had to, saying his own conflict was minor, he had not made money from it, and he had declared the conflict when he became Race Relations Commissioner.

Te Whatu Ora’s new “equity”

Hipkins has also faced questions about Te Whatu Ora’s new “equity” which requires health professionals to take ethnicity into account when prioritising surgeries and referrals, and prioritise Māori and Pacific Islanders over others.

The Equity Adjustor Score uses an algorithm to prioritise patients according to clinical priority, time spent on the waitlist, geographic location (isolated areas), deprivation level and ethnicity.

Hipkins today said there was evidence that some communities - including low-income, rural, Maori and Pacific - had been discriminated against by the health system.

He has asked the Minister of Health to look at the model being used to make sure they were not creating another discrimination in the way they were handling it.

“Maori, Pacific, rural and low income communities have had to wait longer for their health care. I think it’s good that Te Whatu Ora are looking at how to address that,” Hipkins said.

“I’ve just asked [Verrall] to make sure we having swung the pendulum from one extreme to another.”

He said the waitlist data showed those groups fell to the bottom of waitlists and they stayed there longer, even if others were getting treated. “That speaks to systemic bias in the system.”

“Those who are arguing we should do nothing need to explain why they think we should expect those on low incomes, in rural areas and Maori and Pacific should wait for longer.”

National and Act have cried foul, saying ethnicity should not be a factor used to rank patients for surgery. National’s health spokesman Shane Reti urged the Government to drop the criteria.

“While there has been historical inequity that has disadvantaged Māori and Pasifika people, the idea that any government would deliberately rank ethnicities for priority for surgery is offensive, wrong and should halt immediately.

“The way to improve Māori and Pasifika health is through better housing, education and addressing the cost of living, not by disadvantaging others.”