Bud­get 2019: big­gest losers were work­ing fam­i­lies and chil­dren

In­come tax mea­sures only favour high earn­ers and will do noth­ing to ease the bur­den of child­care costs, writes Michelle Mur­phy

Sunday Independent (Ireland) - - Analysis -

‘Ire­land has the high­est pro­por­tion of young peo­ple aged 0-14 across the en­tire EU...’

THIS year’s Bud­get has yet again failed to sig­nif­i­cantly al­le­vi­ate the crip­pling pres­sure on young fam­i­lies. Ac­cess to qual­ity and af­ford­able child­care and af­ter-school care is a sig­nif­i­cant chal­lenge fac­ing fam­i­lies with young chil­dren in Ire­land.

As a per­cent­age of wages, net child­care costs in Ire­land are the high­est in the Eu­ro­pean Union. Mea­sures in­tro­duced in Bud­get 2019 will fall far short of eas­ing the cost of child­care for work­ing fam­i­lies.

Ire­land has the high­est pro­por­tion of young peo­ple aged 0-14 across the EU-28. The pro­vi­sion of qual­ity, af­ford­able, ac­ces­si­ble child­care for par­ents is es­sen­tial, par­tic­u­larly for fam­i­lies who have moved away from their home base (towns and coun­ties), and fa­mil­ial sup­port struc­tures, to take up em­ploy­ment.

High child­care costs are a bar­rier to em­ploy­ment, par­tic­u­larly among young women with chil­dren.

Child­care is also es­sen­tial for those who are fur­thest from the labour mar­ket to gain the skills and con­fi­dence nec­es­sary to par­tic­i­pate fully in so­ci­ety and to take ad­van­tage of em­ploy­ment and train­ing op­por­tu­ni­ties.

Lack of com­mu­nity and af­ford­able child­care presents a sig­nif­i­cant bar­rier to labour-mar­ket par­tic­i­pa­tion for low-in­come fam­i­lies — par­tic­u­larly women who wish to re­turn to em­ploy­ment fol­low­ing the birth of their chil­dren.

A sig­nif­i­cant pro­por­tion of one- and two-par­ent fam­i­lies rely on child­care out­side the home. Two-thirds of lone par­ents of pre-school aged chil­dren who work full-time rely on non-parental child- care, and 70pc of cou­ples with chil­dren of pre-school age who work full-time rely on non-parental child­care.

As a pro­por­tion of av­er­age earn­ings, the cost of full-time care at a typ­i­cal child­care cen­tre ac­counts for al­most 23pc of the full-time earn­ings of a cou­ple.

The group es­tab­lished to ad­vise the Govern­ment on early child­care pre­sented their re­port in 2015 with a num­ber of rec­om­men­da­tions — in­clud­ing in­vest­ment at all lev­els to en­sure fam­i­lies can ac­cess univer­sal, qual­ity and ac­ces­si­ble ser­vices.

Ire­land has sig­nif­i­cant ground to make up com­pared with our OECD and EU coun­ter­parts, and govern­ment in­vest­ment in bud­gets 2017, 2018 and 2019 has sim­ply not been enough.

Yes, the in­tro­duc­tion of the Sin­gle Af­ford­able Child­care Scheme in Bud­get 2017 was very wel­come — but in or­der to cre­ate a real im­pact, sig­nif­i­cant and sus­tained in­vest­ment is re­quired over suc­ces­sive Bud­gets. Mea­sures in­tro­duced in Bud­get 2019 to in­crease the net in­come thresh­olds for the af­ford­able scheme are wel­come, mean­ing an ad­di­tional 7,500 chil­dren in the scheme and pro­vid­ing im­proved sub­si­dies for oth­ers.

How­ever, in or­der to re­duce the costs for work­ing fam­i­lies, far more than sub­si­dies are re­quired. Re­ports since the in­tro­duc­tion of the af­ford­able child­care scheme noted that some child­care providers in­creased their fees in line with the amount of sub­sidy, mak­ing no net dif­fer­ence to par­ents.

The Govern­ment needs to re­view the ap­pli­ca­tion of the scheme across child­care providers to en­sure that it is not be­ing abused, to pub­lish the find­ings of that re­port and to im­pose sanc­tions on those providers seen to be tak­ing ad­van­tage of a pol­icy in­tended to sup­port work­ing fam­i­lies, par­tic­u­larly those on low in­comes.

Fur­ther­more, there is ge­o­graph­i­cal dis­par­ity across the coun­try in terms of both the af­ford­abil­ity of child­care, and also the type of child­care which fam­i­lies are us­ing.

The lat­est Cen­tral Sta­tis­tics Of­fice sur­vey on child­care shows that in the west and mid­lands, for ex­am­ple, of those fam­i­lies of pre-school chil­dren who are us­ing non-parental care, child­min­ders are the most com­mon type of child­care used.

When de­sign­ing mea­sures to sup­port fam­i­lies, it is im­por­tant that we recog­nise the need to sup­port child­min­ders and other ar­range­ments — and that, ul­ti­mately, in­vest­ment in univer­sal and qual­ity ser­vices are best for every­one.

So what could have been done last Tues­day to ease the fi­nan­cial bur­den of child­care for fam­i­lies?

The Min­is­ter for Fi­nance an­nounced an in­come tax pack­age at a cost of €356m. The changes made are skewed and pro­vide the largest gains to those on high­est in­comes and will make lit­tle real dif­fer­ence to work­ing fam­i­lies. A cou­ple with two earn­ers on a com­bined €50,000 per an­num will be 87 cent a week bet­ter off as a re­sult of these changes — a drop in the ocean in terms of eas­ing the fi­nan­cial bur­den of child­care.

With the cost of child­care such a huge bur­den for fam­i­lies, could such a large amount of an­nual tax­a­tion rev­enue have been used in a bet­ter way? Think of the dif­fer­ence to fam­i­lies if the Govern­ment had in­vested that €356m into de­liv­er­ing a com­pre­hen­sive child­care pack­age.

Bud­gets are about choices and pri­or­i­ties. In Bud­get 2019, the Govern­ment chose not to pri­ori­tise chil­dren and fam­i­lies. Michelle Mur­phy is a re­search and pol­icy an­a­lyst with So­cial Jus­tice Ire­land

CAUGHT IN A TRAP: As a per­cent­age of wages, net child­care costs in Ire­land are the high­est in the Eu­ro­pean Union

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