Thursday, July 07, 2005

A point of difference

National's unveiling of tax-credits for pre-school childcare is being hailed by the media as a clear point of difference between the two major parties. It certainly is. Quite apart from differences of generosity (Labour's scheme delivers almost $5000 of assistance in kind, versus National's maximum of $1650 as a tax-credit), and focus (Labour is pushing early-childhood education, National childcare and nannies), there is also a clear difference in philosophy - as seen in who is targetted and who benefits.

Labour's scheme is aimed at empowering individuals, and it does so on an equal basis. Every child is entitled to 20 hours a week of free early education at community-run centres, regardless of how much their parents work or earn. The benefits flow to everyone, but particularly those who cannot presently afford early education or childcare. National's scheme, by contrast, is aimed at further advantaging those who are already advantaged. By using a tax-credit, they lock out anyone who cannot afford to wait until the end of the financial year to recoup their costs; by denying it to beneficiaries, they ensure that the poorest receive no assistance. The net result will be to make childcare more affordable to the already-affluent, while leaving it just as expensive for those most in need. The benefits will flow to the already wealthy, and to privately-run, fee-charging childcare centres, who will benefit from any upturn in business.

Equal provision versus subsidies for the rich. That's the difference between Labour and National in a nutshell, and it is indeed a clear one.


Labour's policy is better in that it does not discriminate against those who are not in paid employment, but it seriously flawed in the restriction to "community-based" centres.

Kindergartens, play-centres etc depend to a greater or lesser extent on volunteer labour and fundraising from parents. New ones are hard to get off the ground. I do not understand why we want to discourage investors from using their capital to create new centres.

Your supposition that community-run centres don't charge fees is also wrong.

I don't like the tax-credit mechanism, but Labour's approach is not perfect either.

See here:

Posted by stephen : 7/07/2005 11:07:00 AM

Yes, I don't agree with the bias against privately run child care centres. My daughter goes to one and they are great. The other immediately local alternative has restricted hours for different agre groups and requires much more voluntary involvement from parents (or in fact mothers though they don't explicitly say this). Not really compatable with the working parent life style.

I'd like to see more active encouragement of large employers in providing child care facilities too.

Posted by Make Tea Not War : 7/07/2005 02:28:00 PM

Uh, the flaws...

Playcentres are pretty explicitly excluded from Labour's 20 hours per week. But their fees tend to be very low anyway (they require parental/caregive labour instead) the Nats policy isn't much help either.

A computer consultant on $170,000 a year would receive $3300 in tax money from National towards their nanny for their two kids. I can't see what this accomplishes in terms of social goods, though as with all tax cuts I do see votes in it.

Posted by Icehawk : 7/07/2005 05:24:00 PM