Legislation seeking to extend paid parental leave to 26 weeks has failed in Parliament after the government used its power of financial veto.
Finance Minister Bill English said the extension to paid parental leave would have been too costly.
The bill in the name of Labour MP Sue Moroney had enough support to pass into law but was not voted on at its third reading because of the veto.
Ms Moroney told Parliament that using the veto was an extreme measure, and today was a shameful day for democracy.
"For the first time in this Parliament's history a bill is about to have a third reading debate and there will be no vote put at the end of this.
"Why is that? It's because that National government does not prioritise families and their children enough to care."
At the end of the third reading debate tonight Labour and Green Party MPs tried every avenue they could to get a vote on the bill, but the Assistant Speaker Lindsay Tisch would not allow it.
Ms Moroney said she would not submit her bill back into the members ballot, but would continue to campaign for paid parental leave to be extended to 26 weeks.