Potential allies unimpressed by Nats' childcare policy

National's potential allies -- ACT and United Future -- have attacked its plans to offer tax breaks for childcare.

If National is elected the policy would come into effect in April and would allow parents to claim back 33 per cent of up to $5000 a year in pre-school childcare costs -- in effect a maximum of $1650 a child.

National estimated it would cost $160 million a year and would be partly funded by axing Labour's plans to introduce 20 hours free care for children aged three and four at community-based, teacher-led childhood education centres.

Government officials said axing the childhood education funding would save around $50 million a year.

United Future Leader Peter Dunne said the policy showed National Leader Don Brash did not understand the difference between childcare and early education.

The 20 hour scheme was designed to increase participation in early childhood education, while the childcare rebate covered any sort of childcare, Mr Dunne said.

"Once we strip away the spin, National is offering a worse deal for both parents and children," Mr Dunne said.

National was right to point out that Government's plans for early childhood education were too inflexible, but "throwing the baby out with the bathwater" was anything but family friendly.

United Future proposed extending the 20 hours free early education to all registered providers at a cost of $60 million.

ACT Leader Rodney Hide said New Zealanders wanted comprehensive tax cuts without strings attached so they could decide how to spend their money.

National would complicate the tax system when it needed simplification.

"The best policy for parents is ACT's tax policy of dropping the top tax rate to 25c in the dollar and extending the 15c rate up to $38,000. That will allow parents to afford childcare if that is their choice," Mr Hide said.

National has said its tax rebate would be available on all forms of childcare, such as childcare centres or nannies or other home-based carers that were not paid under the table.

National leader Don Brash said his party recognised that childcare costs were a serious burden for families and that present assistance dictated what form that childcare should take.

Social Development Minister Steve Maharey said the policy would disadvantage 86,000 children and their parents who would lose out from the axing of 20 hours of free early childhood education.

- NZPA