PDs and childcare

AndyWarhol

On the face of it, proposing an €8,000 tax credit for childcare seems a fair enough move. It would attract the commuter classes of outer suburban Dublin who very often have no choice but to work whilst raising their families. Really though, such a drastic tax break will only contribute to inflation in the costs of childcare.

Childcare is at a premium in Ireland because there are not enough places. Because of this, parents are left to fork out exhorbitant fees, that the childcare company knows they can charge, because the parent is often left with no choice but to work in order to pay off some sky-high mortgage.

A smarter incentive would be build more childcare places, increasing supply and creating more competition. I'm not proposing the government set up some state childcare facility, but they should create incentives for investors to create a competitive childcare industry.

Of course childcare is not cheap and will always be expensive, but if a competitive environment can be created coupled with a more modest tax allowance for parents who choose to work, I think this would be a better solution than the drastic tax breaks the PDs are proposing.

rsynnott

Childcare is intrinsically expensive, because of high labour demands.

Calina

AndyWarhol wrote:

Childcare is at a premium in Ireland because there are not enough places. Because of this, parents are left to fork out exhorbitant fees, that the childcare company knows they can charge, because the parent is often left with no choice but to work in order to pay off some sky-high mortgage.

It's a simplistic view, to be honest with you. The difference between disposable income and childcare costs is on occasion sufficiently little as makes no difference and thus contributes nada to the servicing of the mortgage.

AndyWarhol

Calina wrote:

It's a simplistic view, to be honest with you. The difference between disposable income and childcare costs is on occasion sufficiently little as makes no difference and thus contributes nada to the servicing of the mortgage.

? Not quite sure where you're coming from with that response. Perhaps you could be a little clearer?

Simplistic my logic may be; yet you haven't addressed my reasoning.

black_jack

AndyWarhol wrote:

On the face of it, proposing an €8,000 tax credit for childcare seems a fair enough move. It would attract the commuter classes of outer suburban Dublin who very often have no choice but to work whilst raising their families. Really though, such a drastic tax break will only contribute to inflation in the costs of childcare.

Childcare is at a premium in Ireland because there are not enough places. Because of this, parents are left to fork out exhorbitant fees, that the childcare company knows they can charge, because the parent is often left with no choice but to work in order to pay off some sky-high mortgage.

A smarter incentive would be build more childcare places, increasing supply and creating more competition. I'm not proposing the government set up some state childcare facility, but they should create incentives for investors to create a competitive childcare industry.

Of course childcare is not cheap and will always be expensive, but if a competitive environment can be created coupled with a more modest tax allowance for parents who choose to work, I think this would be a better solution than the drastic tax breaks the PDs are proposing.

How about the fact that by making the industry more profitable you may encourage the wrong sort of people, less motivated by a desire to work with children, and more with their eye on the bottom line.

The tax break is drastic when you consider the amount childcare costs.

simu

black_jack wrote:

How about the fact that by making the industry more profitable you may encourage the wrong sort of people, less motivated by a desire to work with children, and more with their eye on the bottom line.

???

Look, it's hard work and the people who do it deserve a decent wage. Whilst people may have a desire to work with children, you can't run an industry on desire - people need pay checks too!

Would you say that, say, teachers should be payed less in case people are doing it for the money rather than out of pure altruism? Or any other job?

No offense, but your post seems to me to reflect the tendency in this country to belittle that value of quality childcare and to assume that there'll always be some saintly type around to do it out of the goodness of their heart.

Victor

I think tax credits are the wrong way to go, all they do is enrich those on higher incomes, it does little to encourage people into the workforce.

RicardoSmith

Victor wrote:

I think tax credits are the wrong way to go, all they do is enrich those on higher incomes, it does little to encourage people into the workforce.

It should be means tested, in the same way college grants used to be. Mind you there are ways around that too.

base2

Why should the state finance someones decision to leave their child in a creche 5 days a week? Can they not pay it themselves with the money they earn?

AndyWarhol

base2 wrote:

Why should the state finance someones decision to leave their child in a creche 5 days a week? Can they not pay it themselves with the money they earn?

No I'm sorry but I have to disagree with you there. The family is an important part of our society and this must be reflected in the taxation system. If you apply your logic, then why have state funded schools at all? Why not just privatise the whole lot and get people to pay for 'it themselves with the money they earn?'.

RicardoSmith

base2 wrote:

Why should the state finance someones decision to leave their child in a creche 5 days a week? Can they not pay it themselves with the money they earn?

In many cases no. Thats the whole point! The alternative is to go on the dole and claim. Is that better?

I have a friend who has a great job, but just had twins. The cost of the twins in childcare is more than the price of their mortage and its 50% of their salary. Having a mortgage is cheaper than renting before you go down that route.

For many people they work in the hope that eventually their income will grow so that its greater then their cost of living. The problem is with inflation the cost of living is increasing faster than wage increases. The problem is that the cost of living (and services) are becoming more than people earn.

For many people they could manage if a large part of their monthly expenses was reduced. Childcare is an easy target because its one big obvious expense. However the real problem is the cost of living.

RicardoSmith

AndyWarhol wrote:

No I'm sorry but I have to disagree with you there. The family is an important part of our society and this must be reflected in the taxation system. If you apply your logic, then why have state funded schools at all? Why not just privatise the whole lot and get people to pay for 'it themselves with the money they earn?'.

Exactly. The only way that argument is going is, privatise all services, and people who can't afford kids or service shouldn't have them. How about the chinese way? One kid only? Or the US way where no one cares about the poor. Basically no social empathy or responsibility at all.

black_jack

simu wrote:

???

Look, it's hard work and the people who do it deserve a decent wage. Whilst people may have a desire to work with children, you can't run an industry on desire - people need pay checks too!

Thats not what I'm saying at all. Incentives to people setting up childcare centers, does not necessarily equate a saving to members of the public or an increased wage to their staff.

Call me a cynic but there'd be no way to regulate who'd benefit from this service (the families? the staff? I suspect the owners!), and I'd suspect the sceheme suggested by Andy would be abused by people who are looking for a profit margin, take the subsidies and run the tightest cheapest ship possible.

Meanwhile, in the current system, parents get the tax credit, and therefore the extra freedom to pick a good or better childcare center, sucessfully and highly regarded centers do well, and therefore generating more income.

I see little point in providing state subsidies for a industry that is undergoing a massive boom.

Frankly, I think the person who's caring for one of the most important people in the world to me deserves more than a decent wage. And I want input, choice, and an active particaption in the choice of who is taking care of children. The tax credits, give the parents more money to shop around and put money in their hands affording them greater flexibility and choice on deciding whom is taking care of their children.

In short lets call it the "annie effect" I'd be worried that such a subsidy scheme would encourage a Lily St. Regis type company setting up for the wrong reasons.

Would you say that, say, teachers should be payed less in case people are doing it for the money rather than out of pure altruism? Or any other job?

Empathetically not. And my post is directed not at the individuals who are engaged in this profession but in the morality of companies set up for the express purpose of childcare. My concern is that these suggested incentives would encourage companies with a greater interest in the bottom line, companies who would provide the bare minimum in terms of amenitities and poorly trained staff in order to maximize profits on top of the subsidies.

I am hold the exact opposite attitude that you think I do. I feel that teachers should be well paid, they provide a vital roll. However I am concerned about the concept of a government subsided childcare "gravy train" luring the wrong kind of company into a market place that should be filled with people whose first priority should lie with the care of my child, and they should be rewarded by me, for their due care and attention.

No offense, but your post seems to me to reflect the tendency in this country to belittle that value of quality childcare and to assume that there'll always be some saintly type around to do it out of the goodness of their heart.

Again empathetically not.

For example, two good friends of mine are in their late twenties and expecting their first child within 3 months. Already their child's birth is inconvient because they cannot enrol he or she in their prefered primary school for the start of the school year.

They are moderately well off, but had to give serious thought to one of them taking a career sabatical for a number of years due to the cost of childcare. They are respectively a Doctor and a telecommunications network engineer, leaving aside the loss in tax revenue over the years one of them will be at home theres an actual detremential affect to society by their career gap. This tax credit scheme has helped ensure they can afford childcare.

I'm not opposed to state support of childcare costs, I'm not aganist decent wages for childcare workers and teachers. I'm not a fan of the PDs. However these tax credits put the money in the hands of the people best able to suit how the money will effect their specific needs.

The suggestion of state subsidies childcare relies on market forces to lower the price, ignoring regional inconsistencies in the cost of childcare, the differing situation (work patterns etc) of individual families, and the charming habit of corporations gouging those who are at their mercy.

This money means parents can afford to pay for decent childcare, childcare workers get paid a decent wage, and parents are left with disposal income to ensure if their children are in a substandard care center they can move them elsewhere.

I'm sorry if there was any confusion, I don't think childcare workers are over paid, I'd be worried that the suggested idea would encourage less ethical driven companies to enter the "marketplace". Begrudgingly, this is a good move, by the PDs.

Victor wrote:

I think tax credits are the wrong way to go, all they do is enrich those on higher incomes, it does little to encourage people into the workforce.

It's difficult, but as mentioned above I know one couple on a "higher income" intelligent college educated home owners, who needed to give serious, and I mean serious thought to the idea of one of them giving up work. At the time when we're suffering a Doctor's shortage, I could not believe I was listening to a good double income family discuss a career break because it would be financially impossible for them to afford the cost of childcare.

simu

^^

Ah, ok, Blackjack, it seems I took you up the wrong way there and that we are in fact in agreement about many aspects of childcare! :-)

Although, I don't quite get some of your points. You are against a state incentive for private companies to set up creches and so on because you believe that would lead to unscrupulous operators entering this market. But wouldn't the fact that it's a booming market possibly attract the same sort of unscrupulous, corner-cutting operator? And wouldn't the parents' refusal to leave their child at an obviously sub-standard creche come into play in both cases?

But maybe that's being a bit pedantic and off the main point anyway. I agree that there doesn't seem to be much point in giving state subsidies to companies to set up creches and the tax break sounds like a better idea. The whole childcare sector seems to be quite well-regulated already though - the childcare workers I know have all undergone in-depth training and have receive extra training at regular intervals. This is typical afaik.

RicardoSmith

black_jack wrote:

How about the fact that by making the industry more profitable you may encourage the wrong sort of people, less motivated by a desire to work with children, and more with their eye on the bottom line.

The tax break is drastic when you consider the amount childcare costs.

How can it be made more profitable than it is now. Often you pay for a full week even if the child is only there a 2, 3 or 4 days and not 5. You pay in advance, if theres any problems the child doesn't go, but you still pay, you have to take time off work etc. Quite often this means you don't get paid for those days either. The Creches cherry pick the kids and times they want, and basically charge anything they like. The staff don't make the money, but the owners are creaming it in.

I think you should worry about the parents now, and the creche owners later.

While there is a problem of enough childcare places. I think the bigger problem is that people can't afford childcare.

simu

RicardoSmith wrote:

How can it be made more profitable than it is now. Often you pay for a full week even if the child is only there a 2, 3 or 4 days and not 5. You pay in advance, if theres any problems the child doesn't go

Well, the thing is the workers have to be there and the place ready and open. It's not unreasonable at all imo. Of course, in many cases, it's the owners not the workers who make the profits but that's the case in any private industry.

Also, there are creches that let you pick say, a 3 day week instead of the full 5 and you pay accordingly.

RicardoSmith

simu wrote:

Well, the thing is the workers have to be there and the place ready and open. It's not unreasonable at all imo. Of course, in many cases, it's the owners not the workers who make the profits but that's the case in any private industry. Also, there are creches that let you pick say, a 3 day week instead of the full 5 and you pay accordingly.

Very few of them.

Cronus333

Yes but wouldnt that reduce the cost of living on its own?

Victor

simu wrote:

Although, I don't quite get some of your points. You are against a state incentive for private companies to set up creches and so on because you believe that would lead to unscrupulous operators entering this market.

Specificly tax incentives attract the wrong types. I heard or one nursing home owner refusing to sell to investors, knowing they were only interested in teh tax break, not caring for people.

RicardoSmith

I can't see why you'd give the tax breaks to the creches? Or are you saying by giving it to the parents you are giving it to the creches. I reckon by giving it to the parents your stopping them needing more money, thus increasing the cost wages further.

black_jack

RicardoSmith wrote:

How can it be made more profitable than it is now.

Um dude did you like, totally not read the OP

AndyWarhol wrote:

but they should create incentives for investors to create a competitive childcare industry.

Often you pay for a full week even if the child is only there a 2, 3 or 4 days and not 5. You pay in advance, if theres any problems the child doesn't go, but you still pay, you have to take time off work etc. Quite often this means you don't get paid for those days either. The Creches cherry pick the kids and times they want, and basically charge anything they like. The staff don't make the money, but the owners are creaming it in.

I think you should worry about the parents now, and the creche owners later.

While there is a problem of enough childcare places. I think the bigger problem is that people can't afford childcare.

And the tax incentives help these families. I really think I'm arguing with people who agree with me.

simu wrote:

Although, I don't quite get some of your points. You are against a state incentive for private companies to set up creches and so on because you believe that would lead to unscrupulous operators entering this market. But wouldn't the fact that it's a booming market possibly attract the same sort of unscrupulous, corner-cutting operator? And wouldn't the parents' refusal to leave their child at an obviously sub-standard creche come into play in both cases?

And again tax incentives come into play. The parents, or the consumer, has the power. If theres a poorly run creche down the road and a slightly better one half a mile away with better standards of care, whom do you go to. Obvious, unless the superior creche is out of your budget, the tax credits give the power to the consumer. Funding and choosing childcare is one of those things I feel is best left entirely to the parents so the tax credits give them more choice, if the parents need a creche with longer opening hours overrides their needs for a nearby creche, this money gives them the freedom to choose.

The whole childcare sector seems to be quite well-regulated already though - the childcare workers I know have all undergone in-depth training and have receive extra training at regular intervals. This is typical afaik.

Yes it does, which is why I'd be mortaliy opposed to state subsidies, as Victor pointed out theres some less slaburious care homes out there, run by people more interested in the bottom line. One needs only to look at the pensions fiasco of earlier of this year to see how state funding of the most vunerable can be used by the unscrupulous for finacial gain. The care of my parents and my children is something I want to have a great deal of power over, and tax credits puts that money and power in my hands.

Its interesting to note the OP has once again on a thread ignored my points.

RicardoSmith

It not about not reading the original point, its about not agreeing with that your saying. Maybe you should reread what I've been saying :rolleyes:

This is not a case where you suddenly have 8k to cherry pick the best creche to suit your lifestyle. The creches are already competing with one another and if you have the means to build a larger creche you will always find clients for them. These guys will not get a huge increase in clients with money to throw around. If you need a creche, you'll have it now. No ones saying that they can't get a creche place, they are saying its wiping out their monthly income.

What a means tested the tax breaks will do, is allow people to "work" and pay for things like medical care, pensions, reduce their debts, and save for the future. If you are going to use it for lifestyle changes then the means test is there to catch that.

I don't see it will suddenly inject new growth in the creche industry. Theres only x amount of kids. To go around. If you need a creche because you have to work to pay your bills, then the kid will be in a creche now. The problem is now that for some people, working all week simply isn't enough to pay all the bills. Its not a case of I can't afford to use the creche so I'm at home on the dole. Its I'm working all week and and I can't make ends meet.

Theres unscrupulous people in every market. In fact in a market where people are struggling to pay the bills it allows more of them in because people have no choice but to use the "bad" creches. Personally I don't think the dickens imagery you have going on there is really a major problem. You don't leave your kids with a "bad" creche to save money. Only someone who doesn't have kids would come up with that theory.

bonkey

AndyWarhol wrote:

Childcare is at a premium in Ireland because there are not enough places.
...
A smarter incentive would be build more childcare places, increasing supply and creating more competition. I'm not proposing the government set up some state childcare facility, but they should create incentives for investors to create a competitive childcare industry.

I don't follow this logic at all.

If there is a shortage of places, then there is scope in the marke for more childcare without an increase in competition. Thus, there is scope for more childcare at the current expensive rates. Exactly what more incentive do investors need?

The solution to the Dublin housing problem was not for the government to pay builders to build more houses. Also, as we've seen, it was not to relieve government-based costs (taxes) on buyers as, in a supply-short market, this just (logically) causes a matching hike in prices.

I don't see how giving incentives to the creche-owners would be any different.

Personally, I'm not convinced there is a good creche-based solution. Creches will form part of a solution, but personally, I see the entire problem being more related to this part of your post:

who very often have no choice but to work whilst raising their families

Fix this problem, and the problem with creches goes away.

Creches aren't a solution. They're a symptom.

jc

holly_johnson

This particular issue is one that's close to my heart.
I have been harassing politicians for 4 years about this, and tbh, I have had enough.
It really frustrates me to think that they are only jumping on this bandwagon now, because it suits them, and not when people have been crying out for help for years.

Anyway, the biggest issue I have with this tax credit, is that creche fees will rise as soon as it is implemented. I can almost guarantee that if this credit is given, within a couple of months, you will see creche fees rising by virtually the same amount. Cynical opinion I know, but a realistic one also imo.

RicardoSmith

holly_johnson wrote:

This particular issue is one that's close to my heart.
I have been harassing politicians for 4 years about this, and tbh, I have had enough.
It really frustrates me to think that they are only jumping on this bandwagon now, because it suits them, and not when people have been crying out for help for years.

Anyway, the biggest issue I have with this tax credit, is that creche fees will rise as soon as it is implemented. I can almost guarantee that if this credit is given, within a couple of months, you will see creche fees rising by virtually the same amount. Cynical opinion I know, but a realistic one also imo.

True thats a worry alright. I wonder what controls can be put in place to stop this.