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29 Jun 2022

Government plans to slash childcare costs in budget

Government plans to slash childcare costs in budget

The Government is to prioritise childcare fees in the next budget as part of a plan to cut costs for families.

Taoiseach Micheal Martin said it is the objective of government to look at the affordability issues of childcare.

The Government is looking at different ways to slash costs for householders as part of its cost-of-living budget in October.

It has so far resisted calls to bring in an emergency budget, with Mr Martin saying they cannot chase inflation on a month-to-month basis.

Mr Martin did not give any details, saying only that decisions will be made within the fiscal framework.

Speaking at the National Economic Dialogue at Dublin Castle, Mr Martin said: “The budget isn’t going to be announced today and I don’t mean that in any sort of facetious way.

“Childcare is a big issue.

“It’s a very significant cost pressure on families and we’re going to look at that.

“Last year we took significant measures around giving resources to (Children’s) Minister (Roderic) O’Gorman to work with the partners in childcare around pay and conditions and to create meaningful career pathways for people working in childcare.

“We’re very clear across government that the next budget has to look at affordability issues in childcare.

“So that certainly is an issue that will merit consideration.

“That is the objective of government. We have to do it, obviously, within the fiscal framework.”

Tanaiste Leo Varadkar told reporters at Dublin Castle that all three government parties are “determined to make a significant move on the cost of childcare”.

The enterprise minister said: “It’s an enormous cost for a lot of parents, for a lot of young families in particular.

“And it also prevents a lot of people getting back into the workforce, so it makes economic sense to substantially reduce the cost of childcare.”

When asked whether childcare costs would be halved, Mr Varadkar said he didn’t want to “raise expectations”, and that the Government had to engage with the sector before a final decision is made.

Mr Varadkar said Mr O’Gorman is “developing 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.

“There’s three things at play really,” Mr Varadkar said. “What do you do, how much it will cost, and how soon can you implement it. So that work really is under way at the moment.”

“We just have to spend the next couple of weeks, couple of months, working out the different options, costing them, and then engaging with the sector on their implementation because obviously we don’t want to announce something and then it can’t be done.”

Mr Martin said the budget plans will be “comprehensive” and need to be sustainable over a longer period of time.

“We can’t chase inflation in a simplistic way, we do not want to repeat the mistakes in the 1970s when we had a decade of rampant inflation, which really damaged disposable income and the economy at that time,” Mr Martin added.

“We want to do this in a detailed, in an evidence-based way, with significant work and look at how we can bring costs down. The forthcoming budget will be a cost-of-living budget and what we do has to be comprehensive, has to be sustainable over a longer period of time than just going from a month-to-month situation.

“We’ve already brought in measures. There is no doubt people are under enormous pressure because of what is happening, but what we have to do is, in the context of the budget, is to reduce the pressure on people but do it in a way that’s comprehensive, that’s sustainable, and that will be applicable this year.”

He said the Government will consider recommendations from a number of advisory and research bodies, including the Economic and Social Research Institute (ESRI).

The Fianna Fail leader said everything will be assessed on an evidence-based approach.

Asked if the Government will consider a new rainy day fund, Mr Martin said he will assess the idea in the lead-up to the budget.

“A month-to-month approach is not ideal but we understand the pressures. But we’ve got to accept that the winter period could be the most significant period of this crisis so far,” he added.

“Therefore we’ve got to make sure that we have enough in reserve to deal with that and to keep the pressure off to make sure people have some quality of life and get through the winter period.

“That’s why we’re being particularly focused on the idea that whatever we do has to be sustainable.”

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