KEY POINTS:
At heart, the present Government is a traditional socialist party. It prefers public to private provision of state-subsidised services and wherever possible it wants those subsidies to be available to everyone rather than "targeted" to the low-paid. That is how it has got itself into an impossible bind with its policy to provide every child aged 3 to 5 with free daycare for 20 hours a week.
When first announced, the benefit was to be available only to children attending not-for-profit "community" childcare centres. It was to be denied to the private daycare industry that had burgeoned over the previous decade to meet the needs of working parents. The Government ignored the protests of those who had invested in daycare provision, even though most were willing to see that their staffing and facilities met the standards required.
The Government remained indifferent to the fate of the private sector until it realised, not long before the subsidy was to start, that there simply were not enough "not for profit" centres to provide reasonable coverage. So, reluctantly, it agreed to provide 20-hours free daycare through private providers too. Now it is in the same bind it has been in with private medical providers and others. The rate the Government is prepared to pay is less than the rate at which the private sector says it can profitably provide the service.
The solution, suggests a letter to preschool centres from the Ministry of Education, is for the centres to increase their charges for children outside the subsidised scheme, namely those under 3. This letter has been greeted, quite rightly, with disgust. The president of the Early Childhood Council, Sue Thorne, said, "I would find it unacceptable as a parent to think I was paying more for my 1 or 2-year-old so it could be free for someone pulling up next to me in the carpark."
It was a "bizarre" suggestion, she added. "I don't think parents will wear it at all." But it is not so bizarre from this Government. Ever since it began to phase in new primary healthcare subsidies it has watched GPs ramp up their charges for unsubsidised age groups to cover real or feared losses on the subsidised patients. Full fee-paying patients have been largely unaware of the reason for the increase and parents of very young children might have been similarly unaware of the subsidy they would have been providing if the letter from the ministry had not come to light.
The writer, the ministry's senior programme manager of early childhood education, Rose Cole, says the letter was not an invitation to boost fees but to suggest centres review their fees and services to find out how the state funding affected them. Yes, Sir Humphrey. Despite the denials of Education Minister Steve Maharey it seems quite likely the Government would have been content to trumpet its free 20-hours a week while centres quietly covered their losses with higher charges for younger children.
Subsidised childcare is a new and urgent social need. Modern living standards are now based on double-income households and most new parents need to return to full-time work by the time a baby is a year old. Most manage to afford the cost, though some probably cannot. They need Government assistance for it and should get it. If the Government simply provided fully subsidised childcare to those who could not otherwise afford it, there would be no problem.
But this would involve a means test and targeted assistance, which run counter to Labour's social philosophy. Universal benefits, the party believes, avoid resentment and create a collective interest in their retention. But they are financially prohibitive. One way or another some people must subsidise others. Better that it is done honestly by income tests than by subterfuge.
