Tax breaks for childcare will drive up prices, committee told
Published 08/05/2015 | 02:30
Tax credits for childcare can lead to costs going up, as has happened in other countries where they've been introduced, a Dáil committee on children has been told.
While recent public debate has focused on tax credits as a way of tackling childcare costs, these can actually drive prices up without doing anything to improve the quality of care, said Ciairin de Buis of Start Strong, a coalition of groups seeking better childcare and education for young children.
"This happened in both the Netherlands and Australia when they moved to childcare tax credits during the 2000s, and both subsequently saw the rise in childcare costs outstripping inflation and negating the financial benefit of the tax credits for parents," she said.
Childcare costs had more than doubled in Australia between 1996 and 2007, whereas general inflation was just 27pc, even though a childcare tax rebate was introduced during that period, Start Strong said.
Subsidising the price parents paid for childcare places and linking that funding to the quality of care would be more beneficial, Ms De Buis said.
She estimated there are around 50,000 young children also being cared for by paid childminders, and these should be regulated and Garda-vetted to reduce the risks and give them more support and recognition.
Irish Government spending on childcare is among the lowest in the OECD, at just 0.4pc of GDP, compared with an average of 0.7pc and twice that is Scandinavian countries, said Orla O'Connor of the National Women's Council.
Parents in Denmark pay just €422 a month for full-time childcare and this is reduced for those on lower incomes, she said. The high costs of childcare in Ireland meant that the numbers of mothers working is as low as 42pc for those with three children, compared with 86pc for childless women.