Childcare measures in budget a good start but we still have long way to go

Lower childcare costs would do more to encourage labour market participation

What do creche owners and mothers think of the new affordable childcare scheme? Video: Niall Sargent

 

The quality of care for our children is a vital investment in the future. Early childcare education and care is a vital service with benefits for children, families, workers and businesses.

The increases in funding for this sector announced in the budget are very welcome. The universal payment of €75 a month for families under the Affordable Childcare Scheme will go some of the way to offset the cost which can be as high as €1,200 a month, according to an ICTU survey.

Moreover, the use of a means-tested approach to funding for families is good since, according to the details of the scheme, a subsidy of €1,122 per month is available in respect of families with a net income of up to €26,580 per annum.

In this way the very limited resources available for the scheme at this initial stage are being used to prioritise low-income families.

Lone-parent families are particularly vulnerable to exclusion from the labour market as a result of inadequate childcare as well as the impact of cuts to services and incomes over recent years.

While a good start has been made in this year’s budget, the total outlay on this important area of investment is well below what it needs to be in order to reach the target of a full, comprehensive system of provision for all families who need it.

We probably need to invest close to €2 billion rather than the €466 million planned for next year. Achieving this goal will take many budgets as well as a strategic vision for the next 20 years backed by a plan to increase investment.

Fragmented

We should recall that, under the tight EU fiscal rules, every euro in tax cuts is a euro that could have been spent on children in equipping them with the care and education that can make a dramatic difference later on in school and in life.

To reach European levels of provision and quality, it is vital that the sector is adequately funded and that staff are adequately trained and remunerated.

The current hapless and fragmented system of provision, often reliant on cheap labour, will need to be dramatically overhauled and adequately funded as part of a long-term plan.

Lowering the cost of childcare (which is among the highest in OECD countries) would do more to encourage labour market participation than measures to lower personal income taxes where, as a country, we need to pay more.

Employers should also contribute more to childcare through specially ringfenced funding from the social insurance fund.

We still have a long way to go after a good start.

Tom Healy is director of the Nevin Economic Research Institute

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