Government backflip over childcare cash

Labour will extend its 20 hours-a-week free childcare plan to private centres after a policy u-turn.

It had initially offered free care only to children attending community-based childcare centres, but announced yesterday that the care would be widened to include all licensed teacher-led services from July 2007.

The announcement, made on the day of National's release of its much anticipated tax cuts, will yield $90 a week more for all families with children aged 3 and 4 in early childhood education.

The extension will cost $53 million a year, on top of the $52 million already budgeted to cover community-based centres.

The announcement, made yesterday by Prime Minister Helen Clark and Education Minister Trevor Mallard at the Tots Corner private care centre in Northcote, is expected to benefit children at an extra 1000 centres.

Last year there were 45,000 children in privately-owned teacher-led centres and 65,000 in community-owned centres.

It marks a significant shift in Labour's policy, which has previously avoided using taxpayers' money to fund private centres.

Mr Mallard has been highly critical of private centres. In 2003, when asked why the Government did not fund early childcare centres on the basis of quality rather than who owned them, he replied: "Because this Government cares about quality of service, not of lining the pockets of individuals who want to take advantage of Kentucky Fried Childcare."

Last month Mr Mallard said Labour's plan was designed to target taxpayers' money towards quality childhood education for preschoolers, hence the restriction on which centres qualified for the Government subsidy.

Yesterday's announcement is an attempt by Labour to appeal to the parents of the 45,000 children who attend private centres and to silence the critics who were saying some families would miss out under the scheme.

The original policy applied only to community centres with qualified teachers. Because there is a shortage - some towns and suburbs in fact do not have any such centres - some families would have missed out.

Labour's original $52 million scheme had looked stingy compared with National's $160 million-a-year plan, and the extension will go some way towards reducing the difference.

National plans to offer yearly tax rebates of up to $1650 for each preschooler to working parents.

National education spokesman Bill English said parents would be cynical about the sudden policy change.

"A few months ago Labour had no money for tax cuts yet suddenly they have found hundreds of millions for election year bribes."

Act education spokeswoman Deborah Coddington said Labour had "temporarily ditched its ideological bias against private providers" to win more votes.

Helen Clark said the extension to include private operators boiled down to cost.

"As a result of last week's fiscal update, as well as the family tax relief, we determined that we could move to extend the 20 hours free to all the teacher-led licensed early childhood centres."

She denied the announcement had been deliberately timed to coincide with National's tax announcement.

Early Childhood Council chief executive Sue Thorne said Labour's move was a "victory for common sense and fair play".

Childcare Association chief executive Nancy Bell said Labour had recognised that communities and the private sector both had roles to play in early childhood education.

The policy

Labour extends free early childcare policy to private centres.

The cost

Extra $53 million a year.

The coverage

Extra 45,000 3- and 4-year-olds.