Leo Varadkar said the Government wants to “significantly” lower childcare fees for parents in Carlow and across Ireland as well as addressing rising costs for those working in the sector.
The Tánaiste's comments came ahead of a protest outside Leinster House on Wednesday by providers who say they are “chronically underfunded”.
The Government is said to be looking at options on how to reduce the cost of childcare, including examining whether to increase the number of free hours available under the Early Childhood Care and Education Scheme.
It provides three hours of free pre-school childcare a day, five days a week over the school year for children aged over two years and eight months.
Mr Varadkar told RTE’s Morning Ireland programme: “What we’ve done in recent years is put a lot of additional state funding and state investment into childcare and early childhood education, particularly during the pandemic periods.
“What we want that to bring about is three things. Higher standards for children. Yes, better paid terms and conditions for staff. We’ve a thing called an employer regulation order being negotiated at the moment, which will do that.
“And then particularly next year or even this year if possible, but probably next year: significantly lower fees for parents.”
He suggested most of the additional money in next year’s budget would go to parents to reduce fees and in turn the cost of living for those parents, and would likely be done through subsidies rather than tax breaks.
But he also acknowledged rising costs faced by childcare staff.
Mr Varadkar said: “I want to say to people working in the childcare sector: You know, we do acknowledge that you’re facing rising costs too. Whether it’s rising labour costs, the cost of energy to heat a creche must be going up and the electricity as well.”
He said some some of the additional funding will have to go into helping to meet those costs.
Elaine Dunne, chairperson of the Federation of Early Childhood Providers, said a cap on fees would see them “go bust”.
She told The Niall Boylan Show on Classic Hits radio on Tuesday: “We are all expected to say: ‘Yes, let’s cap our fees.’
“Impossible. We’ll all go bust within the next 18 months to two years if we do that.”
She said services have been “chronically underfunded” but added that they do not want parents to “keep taking the hit”.
Ahead of the protest, she said there could be “mass closures” of services, particularly small services, next year “unless Government listens”.
Subscribe or register today to discover more from DonegalLive.ie
Buy the e-paper of the Donegal Democrat, Donegal People's Press, Donegal Post and Inish Times here for instant access to Donegal's premier news titles.
Keep up with the latest news from Donegal with our daily newsletter featuring the most important stories of the day delivered to your inbox every evening at 5pm.