6 Mar 2023

National's childcare pledge 'not well thought through' - Sepuloni

9:26 am on 6 March 2023
National party leader Christopher Luxon gives his State of the Nation speech in Auckland on Sunday morning, outlining policies National will implement if it is elected this year.

Christopher Luxon. Photo: RNZ / Jane Patterson

The National Party leader has promised to give more families more money to cover the cost of childcare if elected in October.

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

The government has criticised the policy, describing National's plan as "not very well thought through".

Under National's proposal, 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.

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

Simeon Brown

Simeon Brown. Photo: RNZ / Angus Dreaver

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.

Social Development Minister Carmel Sepuloni said it was "good to see National finally recognising the importance of childcare assistance".

Carmel Sepuloni

Carmel Sepuloni. Photo: RNZ/ Samuel Rillstone

National's policy was "not very well thought through and doesn't target those who need the most help, particularly those on the lowest incomes", Sepuloni said.

She 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 percent," 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.

National Party deputy leader Nicola Willis also rejected Labour's criticism that the cost of the policy would blow out, saying National's costings assumed an increase in take-up by parents.

"We are hopeful that this policy will lead some families to take up some extra hours, will allow them to do that."

The party would monitor the policy's effect on fees charged by early childhood care providers.

Competition in many parts of the country would put childcare centres off increasing fees, she said, and National would get rid of restrictions on where new centres could be opened.

The big players in the sector were often in that position because many families chose to send children to them, she told Morning Report.

"We've wanted this money to go direct to parents' bank accounts so that they have agency and choice on where they take their children for early childhood education."

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

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."

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