Business columnist, with a political twist, for NZ Herald

The actual cost of childcare

Working New Zealand families pay the fourth highest percentage of family income for childcare in the OECD. Photo / Thinkstock
Working New Zealand families pay the fourth highest percentage of family income for childcare in the OECD. Photo / Thinkstock

An OECD study out this week has found that working New Zealand families pay 28 per cent of their net income on childcare - the fourth highest percentage of family income in the group of 32 industrialised nations belonging to the organisation.

Considering the OECD average is just 13 per cent, it's pretty shocking stuff.

Australian families only pay 10 per cent of their net incomes; Americans pay 19 per cent and the Swedish - of course - pay just six per cent of net income toward childcare.

But we can take heart that Ireland, Switzerland and the UK come ahead of us.

Britons are reeling from the news that they pay the most - some 33 per cent of a family's total net (after tax) income - towards any childcare, be it nursery, nannies or playschool.

This from the Daily Mail: "The most recent figures show that in the UK, the cost of a full-time under-two's nursery place is £167 (NZ$366) a week - rising to as high as £375 (NZ$823) a week in areas like central London.

This works out as more than £18,000 (almost NZ$40,000) a year."

It's as much as some parents pay to send their kids to Eton or Harrow. And with nursery costs rising at 5.1 per cent a year - well over the rate of inflation - you'd have to imagine someone is making some pretty good money, what with two thirds of all British pre-schoolers spending at least some of their week in daycare.

In Britain, there is little Government support for childcare except for what is targeted at poor families. And despite the New Zealand government's pride in the 20 free hours scheme for three- to four-year-olds here, in truth, many centres can not afford to be part of this scheme and have properly qualified teachers without imposing a surcharge on parents.

Poor families get subsidies, "middle class poor" get tax credits, and everyone else forks out a truckload. That's unless you can get into a free kindergarten. Which in this neck of the woods at least doesn't happen until the child is well over the age of four.

Some would wheel out that old chestnut - that people should only have the children they can afford. And that would be right, if the average wage was reasonable.

But you could also say that when average wage earners are using up almost a third of their salaries on childcare to afford them the luxury of working - and when cheap, substandard childcare is something many families are actively trying to avoid - there is probably something wrong.

With our crappy wages, for sure. But also perhaps with the way we view the importance of this sector.

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Business columnist, with a political twist, for NZ Herald

Dita De Boni is a columnist, commentator and TV producer/journalist. She first wrote columns for the NZ Herald in 1995, moving to daily business news in 1999 for four years, and then to TVNZ in Business, News and Current Affairs. After tiring of the parenting/blogging beat for the Herald Online she moved back to her first love, business (with a politics chaser), writing a column for Friday Business since 2012.

Read more by Dita De Boni

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