Govt's childcare package will see fees go up - expert

November 7, 2022

Sarah Alexander said providers have been "holding off" on raising fees due to affordability.

The Government's new "cost of living package" providing childcare help for families will see fees rise, an early childcare expert says.

Prime Minister Jacinda Ardern yesterday announced the $190 million package, which will provide childcare support payments for lower and middle-income families. The Government has also announced small increases to the Family Tax Credit and Best Start payments.

"We’re targeting one of the most significant costs for working families by making childcare and before and after school care more affordable to a greater number of low and middle-income families," Ardern said.

National leader Christopher Luxon has called the Government's policy "band-aid economics".

It comes after yesterday’s $190 million early childhood education announcement.

And Sarah Alexander, from the Office of Early Childhood Education, told Breakfast this morning the policy will see families' costs rise.

"This package has been announced as helping to tackle the cost of living, but will it tackle the cost of living? Because what's going to happen is fees will go up now," she said.

A young child playing with blocks (file).

"Early childhood service providers have been holding off and holding off from increasing fees, knowing that parents can't afford fee increases and not wanting to lose children because there is fairly fierce competition out there for children with an oversupply of early childhood services."

Alexander said early childcare services have been facing increased costs for staffing, electricity, and other operational costs.

"And they need to be able to pass that on in fees.

"It's brilliant news that the subsidies have been increased, more families will benefit - but the flip side is, they may not see that great a benefit because the subsidy is paid directly to early childhood services who will now feel that they can increase their fees."

SHARE ME

More Stories