A bill extending paid parental leave from 18 weeks to 26 passed its second reading by a whisker in Parliament this evening - 61 votes to 60.
It was opposed by National and ACT and supported by Labour, the Greens, New Zealand First, the Maori Party and United Future.
Its sponsor, Labour MP Sue Moroney, told the House the government was being miserable by opposing the bill.
"Tomorrow the bill that I am proposing would cost just 1.27 percent of new spending that the government is going to propose in its Budget."
Finance Minister Bill English has repeatedly vowed to use the government's power of veto to kill the bill on financial grounds if it passes its third reading.