National Party’s childcare pledge ‘not well thought through’ says Carmel Sepuloni

From RNZ

Social Development Minister Carmel Sepuloni said it was “good to see National finally recognising the importance of childcare assistance” with its policy announcement yesterday.

However, she said the policy was “not very well thought through and doesn’t target those who need the most help, particularly those on the lowest incomes”.

Christopher Luxon unveiled Family Boost - National’s childcare tax rebate - during his state-of-the-nation speech in Auckland on Sunday.

Under National’s proposal, if the party was elected in October, a family earning up to $180,000 could get a rebate. The exact amount would depend on how much is spent on childcare.

Families earning up to $140,000 and paying $400 a week could get a maximum of $75 a week, down to $25 a week if the weekly bill is $100.

The rate would reduce for family incomes over that, topping out at just under $19 a week for those on $180,000.

Christopher Luxon with his wife Amanda at Sunday's National Party conference. Photo / Alex Burton

“Our plan will specifically target lower and middle-income families, to make their lives a bit easier,” Luxon told the crowd in Parnell.

The policy would cost just under $250 million a year and would be funded by reducing the number of consultants in the public sector.

National’s spokesperson for the public service Simeon Brown said the amount spent on contractors and consultants had significantly increased under Labour.

“We’re going to set clear directions to departments and agencies around how they need to reduce the reliance on consultants and contractors, we’re not going to do unnecessary restructures, we’re going to be making sure that there is quarterly reporting of all of the different consultants and contractors across the agencies and the departments,” Brown said.

National spokesperson for the public service Simeon Brown. Photo / Mark Mitchell

Social Development Minister Carmel Sepuloni accused National of not properly considering how they would pay for the policy.

“When we introduced 20 Hours ECE in 2007 there was an increase in average hours attended per week for three and four-year-olds of around 8-10 per cent,” Sepuloni said.

“If just a quarter of the 130,000 households increase the number of hours their child spends in childcare by five hours a week, their policy blows out by around $70 million a year - and that’s likely to be a conservative estimate.”

Luxon rejected that.

“We factored some of that - that there might be more growth,” Luxon said.

“I mean, the great thing here is it also just gives families more choices. So for partners, being able to get back into the workforce, and we have lots of job shortages and opportunities. That’s a good thing. If families choose to want to be able to work longer hours then they can, knowing that they’ve got some more support ... So for us, it’s all about choice.

“But yes, certainly we’ve looked at ... levels of growth, and we’re very comfortable with it,” he said.

The Labour Government late last year announced its own measures to support families with the cost of childcare, which kick in from April 1.

It increased the income threshold for the childcare subsidy, which had been frozen for 12 years.

Under the policy, a family with two parents both working 40 hours a week on $26 an hour with two children under 5 will be eligible for $252 a week.

But exactly how much each family saves on childcare will depend on how many hours they work, their income, how long their children spend in care and the cost of it.

Luxon said National’s policy would be in addition to the childcare subsidy.

“Everything else remains. It’s an ‘and’, not an ‘or’.”

The Family Boost policy was about providing relief to parents, but National would deal with the early childhood education cost structure, Luxon said.

“We will have more to say about that in future.”