More money for childcare – but parents remain tied up in red tape
Family Boost gets a top-up
The government's Family Boost rebate for early childhood education has been expanded, with finance minister Nicola Willis announcing that families can now claim back 40% of their ECE fees, up from 25%. At the same time, the income cap for eligibility has risen sharply, from $180,000 to $229,000 a year, meaning thousands more families now qualify. Willis says this tweak is designed to ensure unspent money in the scheme's pot actually reaches families, after figures revealed surprisingly low uptake: around 60,000 families have claimed Family Boost so far, well short of the original estimates of 130,000 additional households supported.
The changes mean a family paying $100 a week in childcare fees could now get an extra $15 back each week, but the bigger question is whether this extra support will be easy enough to access to make a difference.
Red tape still ties parents in knots
For many families, the real barrier to Family Boost hasn't been the income limit but the paperwork. As Vernon Small wrote in the Sunday Star Times in April (paywalled), the rebate was pitched as an easy 'money in the bank' promise but has turned out to be an exercise in bureaucracy: families must keep invoices, submit them to IRD, and wait for the refund. It's hardly the 'back pocket boost' National advertised during the election.
Writing in The Spinoff in 2023, Aisling Gallagher explained how countries like Australia have abandoned similar rebate models precisely because they burden parents with extra admin while delivering little on affordability. Although Willis has promised to look at direct refunds – paying rebates straight to providers – no fix has been confirmed. Until then, the burden remains on parents to chase money they're entitled to, which many simply don't have time or capacity to do.
Who really benefits?
Another sticking point, Gallagher argues, is that rebates can backfire if providers simply raise fees. In New Zealand's mostly privatised ECE market, any extra cash for parents risks being swallowed by price hikes. It seems the government believes that fees can be kept in check by parents' ability to 'talk with their feet' and choose a cheaper option, but that's unrealistic, says Gallagher: 'Childcare markets do not work under textbook supply and demand imperatives.' Without stronger controls on prices – or more ambitious investment along the lines of Australia's recent billion-dollar boost – the rebate risks acting more as a subsidy for the sector than real relief for parents.
Family Boost does at least give IRD better access to fee data, allowing officials to track 'service provider behaviour around fee charging immediately following subsidy increases', according to the government. But many providers say they have little choice but to raise prices, with or without the Family Boost rebate. As Cate Macintosh reports in The Press (paywalled) small independent operators were already stretched thin by rising teacher pay, inflation and patchy government funding. With the budget's meagre 0.5% funding increase failing to keep pace with costs, some centres are cancelling free hours or hiking fees just to survive.
An overhaul of rules – but will it ease costs?
Some hope rests on recent regulatory changes, which saw associate education minister David Seymour pushing through an overhaul of the tangle of ECE rules. As we discussed back in April, the rule changes primarily involve merging or removing outdated licensing criteria, with the aim of lowering operating costs for centres and, in theory, preventing endless fee hikes.
But with ECE in New Zealand more unaffordable than anywhere else in the developed world, according to the education ministry's own 2022 figures, many argue these tweaks won't go far enough. For parents still paying up to a third of their income for childcare, the promise of affordable, accessible ECE remains just that: a promise.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Otago Daily Times
3 days ago
- Otago Daily Times
FamilyBoost Fizzer
Changes to the early childhood education FamilyBoost package announced this week cannot disguise the fact this National flagship policy has been a fizzer. Prospective voters were told it was expected to help 130,000 low and middle-income families, boosting after-tax pay by up to $75 each week. But only 60,000 families have benefited, and in the first nine months of the scheme only 249 families consistently got the full $75 a week. In the election campaign, FamilyBoost was sold to the public as a rebate system which would be administered by the Inland Revenue Department "with rebates paid directly to parents on a fortnightly basis". Information on childcare expenditure would be provided to IRD directly by childcare providers using existing systems, making the process simple for providers and seamless for parents, according to the campaign document. But the party had not done its homework. As the IRD pointed out in its regulatory impact statement (RIS) on the proposal "administering a childcare tax credit as outlined in pre-election documents requires access to fees information that is linked to individual parents or caregivers, the children in their care, and to their family income for a broad segment of society. Currently no government agency has this fees information." We would be surprised if this could not have been checked before the party flogged its policy to voters. Rather than wait for a direct payments system to be developed, the government was understandably keen to find a way to deliver its promise. It came up with a system whereby eligible families have to pay their fees up front but then can make a claim for part of them. This requires collecting three months of receipts from the early childhood education (ECE) centre and sending them to IRD. This was criticised for being too onerous and not providing the immediate boost to family funds struggling parents might have been hoping for. Finance Minister Nicola Willis has tried to put a brave face on the debacle, but it was only when information about the low uptake came out in April, she said she would be looking at making changes to the scheme. She has seemed keen to blame IRD for over-estimating how many families would qualify for the full rebate (21,000) but IRD made it clear in its RIS the information available was patchy. It said lack of comprehensive ECE fees data from any government agency required it to make assumptions about the severity of the policy problem and the factors causing it, as well as the impact of different options. "This makes it difficult for any government agency to provide advice on how effective existing or new interventions are on the overall affordability of ECE." There will be hopes the changes to the scheme will enable it to benefit far more families, as the proportion of fees which can be claimed has increased from 25% to 40%. The maximum payment is now $120 a week (this would only be available to those paying $300 or more in fees weekly). The amount families can earn yearly to be eligible has increased from $180,000 to $229,000. This has already prompted criticism the scheme will benefit high income earners disproportionately as they already access ECE more because they can afford to. The Office of Early Childhood Education, which was asked for its ideas on the scheme, suggested a rebate of 25% for higher income households and a 50% one for those on lower incomes. It also wanted the rebate cap of $975 a quarter to be per child, rather than per family. Concerns, widely expressed, around the claiming process have not abated. Ms Willis says further work will be done on longer term improvements including ECE providers giving fees information directly to the IRD. The scheme is among the plethora of funding programmes which will be examined in the Early Childhood Education Funding Review announced last month and due to report to the government in about a year. It remains to be seen whether any of its findings will help political parties come up with realistic and comprehensive early childhood funding policies rather than the poorly planned and executed FamilyBoost.
The Spinoff
4 days ago
- The Spinoff
What went wrong with MethaneSat – and who should answer for it?
New Zealand's first publicly funded space mission has ended with a lost satellite and a debate about how we spend our money in space, writes Catherine McGregor in today's extract from The Bulletin. A sudden silence in orbit When MethaneSat lost contact last month, it marked an abrupt end to New Zealand's first publicly funded space mission – and a major setback for local climate science. The satellite, part of an international effort led by the US Environmental Defense Fund, was designed to 'name and shame' major methane polluters. As The Guardian's Veronika Meduna explains, MethaneSat's main focus was on detecting methane leaks from oil and gas production worldwide; the New Zealand-led side project tracked methane release from agriculture, which accounts for almost half of our greenhouse gas emissions. Meduna reports that in total New Zealand contributed NZ$32 million to the mission – $3m more than the figure widely quoted in last week's headlines. Apportioning blame The questions now are less about whether MethaneSat was a good idea and more about whether its problems should have been spotted sooner. Soon after launch, the satellite faced repeated technical issues, including difficulties with its thrusters and unexpected shutdowns caused by solar activity. Nicholas Rattenbury, Auckland University associate professor of physics, points out that 'the principle of caveat emptor is true for spacecraft as much as it is for purchasing a car'. While NZ was not involved in the design and testing, 'we were certainly entitled to relevant information to make a fully informed decision on whether or not to invest'. His colleague, astrophysicist Richard Easther, suggests NZ needs to shoulder some of the blame. Speaking to the Sunday Star Times' Jonathan Killick (paywalled), Easther argues local checks on the satellite's design and readiness were too light, especially given the 'major problems' that became clear long before contact was lost. All experts seem to agree that New Zealand may have relied too much on assurances from overseas partners instead of independent reviews. It's one of the main questions that the postmortem, when it comes, will have to answer. Space agency under scrutiny The MethaneSat failure has turned the spotlight on how New Zealand runs its space activities. The New Zealand Space Agency, formed in 2016 and now with Judith Collins as its minister, acts both as regulator and supporter of the sector. Simon Hunt, writing for BERL, describes it as a 'one-stop shop' for space policy and business support, noting its advantage in being 'not burdened down with outdated policies and processes'. But some researchers argue this dual role can be a conflict. As UoA's Priyanka Dhopade and Catherine Qualtrough write in The Conversation, the set-up of the agency risks 'a conflict of interest between promoting sustainability and fostering economic growth'. Sustainability in space is a growing international concern, Dhopade and Qualtrough write. As the amount of debris in space continues to skyrocket (sorry), scientists are also turning their attention to emerging issues like 'ozone depletion from rocket launches and the accumulation of alumina and soot particles in Earth's atmosphere as re-entering objects burn up'. The rise of Rocket Lab While MethaneSat drifts in silence, New Zealand's biggest space player is enjoying a record run. Rocket Lab – officially a US company – is now valued at over NZ$30 billion, with the share price hitting a record high of around US$38 (NZ$63). The Herald's Chris Keall reports (paywalled) that two factors are fuelling Rocket Lab's rise: fallout from SpaceX founder Elon Musk's feud with Donald Trump, and the upcoming first test launch of Rocket Lab's 'much larger, crew-capable rocket, the Neutron – which will put it toe to toe with SpaceX for the first time'. But the company's success has also attracted protest, reports The Spinoff's Gabi Lardies. Critics have accused Rocket Lab of enabling military surveillance, including through launches of BlackSky satellites allegedly used by Israel's defence forces. Last Friday Rocket Lab sites were picketed, while Palestine Solidarity Network Aotearoa has referred CEO Peter Beck, Judith Collins and others to the office of the prosecutor of the International Criminal Court. Beck has dismissed the claims, insisting the company abides by New Zealand law and doesn't launch weapons. Still, the sight of picket lines outside a NZ success story is a reminder that space, like politics, is never free from earthbound controversies.
The Spinoff
4 days ago
- The Spinoff
Rates rises are due to people voting against rates rises
We ignored our crumbling infrastructure for decades. But having to pay to fix it made people mad. Now it's time to ignore our crumbling infrastructure for decades again. Nicola Willis didn't muck around with niceties when asked to justify the government's plans to cap council rates rises on RNZ. 'Councils don't always do a great job of spending your money like you would spend it. There are wasteful projects – there is evidence of that,' the finance minister said, before ending with a devastating own. 'There will be pushback because when you take candy away from kids in a candy store, they don't really like it. But at the same time, we are on the side of ratepayers.' In other words, we're doing this for the people who think councils are pissing their hard-earned cash up against a gold-plated bike lane. Willis is far from alone in her sentiments. Calling local government wasteful and profligate is reliable go-to if you want to lure spittle-flecked callers to a talkback station or red-faced men to the local Facebook community page. It's been at the heart of hundreds of mayoral campaigns. Recently Ray Chung has tried harnessing the anger, launching a campaign for the Wellington mayoralty centred around a pledge to freeze rates for three years by scrapping 'wasteful projects' and spending smarter. But when you ask for specific examples from these waste disposers, many of them start to founder. Questioned by RNZ's Corin Dann on what he'd cut to make up for the revenue loss caused by his rate freeze, Chung pointed to the council's ballooning staff numbers. 'Our staff numbers have just gone up exponentially and really, I have no idea what a lot of these people do,' he said. Dann moved on, but RNZ went back to fact-check later. It found staff numbers had been mostly static at Wellington City Council for several years, and actually went down in 2024. This is a common theme. The Post has run stories freaking people out about the cost of Wellington's new bike network. Newstalk ZB's Heather du Plessis-Allan has criticised it for spending on a bike lane in Karori, and has repeatedly brought up a single $84,000 bike rack. Wellington council could get rid of everything they're complaining about and still not save the average ratepayer enough for a single extra bag of sour coke lollies per annum. Cycling spending, including pedestrian and bus improvements, accounts for 1% of its investment over the next 10 years, and 0.17% of its recent 17% rates rises, or roughly 72c per ratepayer. The primary culprit for Wellington's rates rise is less wasteful spending and more a long-shirked repair bill. Politicians put off investment in Wellington's pipe network for decades, until eventually it started alternating between leaking and spraying human excrement on passersby. Thanks to her tightwad predecessors, the current mayor Tory Whanau has had to spend tens of millions of dollars to stop the citizens of our nation's capital being drowned in a huge poonami. It's the same story almost everywhere. Councils have underinvested in core services for decades in an effort to keep rates artificially low for the Willises and du Plessis-Allans of the world. Local government rates, as a percentage of the economy, have stayed relatively static for more than 100 years, while central government tax has grown from under 10% to more than 30% in the same time. Meanwhile, pipes, roads, and public buildings have been left to decay. Now the bill has come due. Just fixing the nation's water infrastructure is estimated to cost between $120 and $185 billion over the next 30 years. Council balance sheets are already groaning under the strain. When Auckland councillor Richard Hills first got voted in eight years ago, Watercare's annual budget was $250 million. It's now $1.3 billion. Ten-year transport spending was $20 billion. It's now $63 billion, most of which goes to roads and public transport. As this is happening, the same ratepayers and politicians that benefitted from burying their heads in the sand are complaining they're going to have to pick up some of the tab they've been running up for decades. Local government NZ chairman Sam Broughton describes a kind of doom spiral, where politicians who are upfront about the costs facing council get voted out by the people who want to keep kicking the can down the road, preferably until after they're dead and it's someone else's problem to deal with. 'And so then someone saying 'we're going to keep rates low' gets elected, and you just end up going round and round without dealing with the real issue, which is basic infrastructure needs to be invested in.' The best argument against councils isn't that they're spending too much; it's the opposite. They've failed to provide necessary infrastructure and housing growth for at least the last 50 years, in deference to an ill-informed, unrepresentative voter base that still complains their undercooked investment plans are extravagant. Now, as the pipes spit poo particles, they're having to play catch up. But delaying investment is like not going to the doctor to check your weird-looking mole. The cost, when it arrives, is far greater. It's making the people who've always been mad at spending even more mad. They're talking to National MPs. They're heading to the polls in October. Buckle up, we've got another bill to pass on to the next generation.
