Policies targeting young families are shaping up as the first political battleground of election year.
Labour has announced a $60 a week baby bonus and, eventually, 26 weeks of paid parental leave, and the government is signalling it will unveil a new, extended paid parental leave policy.
Prime Minister John Key has rejected Labour's proposal to extend the paid parental leave, saying it would cost too much.
But he says the Government is working on its own new policy, which he's indicated will expand the existing scheme, but in a more modest way.
Mr Key says the Government will have some room to manoeuvre with about $1 billion of new spending in this year's Budget.