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Here's what you need to know about childcare

Newly elected Hurunui District Councillor and mother-of-three Julia McLean wants reimbursement of her childcare costs while doing council work.

It's 2016 but Kiwi mums say they're still facing barriers when re-entering the workforce thanks to a lack of funding and support around childcare.

Newly-elected district councillor Julia McLean says juggling council responsibilities with caring for a 6-month-old, 4-year-old and 7-year-old put her "on the back foot from the start".

Now the accidental activist has won heavyweight backing in her fight for help with childcare costs, with Equal Employment Opportunities Commissioner Jackie Blue and advocacy group Local Government New Zealand getting in behind her.

McLean has raised issues about New Zealand's childcare system.

We decided to take a look at what's available in terms of childcare and early childhood education in New Zealand, and how the system works.

READ MORE:
Newly-elected councillor Julia McLean wins heavyweight backing in her fight for childcare
Newly-elected Hurunui District councillor Julia McLean will take baby to meetings if childcare costs not subsidised
OECD says Kiwis have the most costly childcare
Capital kindergartens may lose teachers to cuts

 

How much does it cost? What's included? How does New Zealand compares to other countries? And who misses out?

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Equal employment opportunities commissioner Jackie Blue says affordable childcare would help encourage younger women into local politics.

WHAT ARE THE CHILDCARE OPTIONS IN NZ?

New Zealand has more than 4500 licensed Early Childhood Education providers across the country, which employ more than 18,800 qualified teachers.

Of those providers, 53.6 per cent are community-owned, or public, while 46.4 per cent are privately owned. All are licensed by the Ministry of Education. 

New Zealand's childcare funding system is confusing and leaves some parents struggling to pick the best option for them.

Early Childhood Council (ECC) chief executive Peter Reynolds says the services offered by the providers are varied. Some offer the core necessities and do not charge the parents any fees, relying entirely on Government subsidies.

While others can offer things like swimming lessons, or a backyard farm with plants and animals. 

The centres that offer more options are usually more expensive and require parents to top up the government subsidies with a fee.

Education Minister Hekia Parata says an OECD report that's named NZ as one of the most expensive countries for childcare is incorrect.

Reynolds' advice to parents is to shop around for something that suits their budget, hours, location and values.

The average number of hours Kiwi kids spend in early childhood education (ECE) is 20.7 hours a week. There are more than 200,000 kids enrolled across the country.

ECE comes in a range of forms, with 55 per cent of providers coming under the umbrella of education and care - that includes daycares and preschools.

McLean has faced public backlash after speaking out about her chilcare troubles but she's still glad she raised the issue.

Meanwhile, 14 per cent are kindergartens, 11 per cent are home-based, 10 per cent are Te Kohanga Reo and 9 per cent are playcentres (led by parents rather than teachers).

A total of 3181 providers are led by teachers, 887 are led by parents or whanau and 476 are home-based.

HOW MUCH DOES IT COST?

This is a difficult question to answer, Reynolds says.

The range of costs vary greatly. While some families do not have to pay anything at all for their children to be put into childcare, other are looking at fees.

A Government website says charges may vary but based on 2015 figures, the average charge for a kindergarten is $5-6 an hour, playcentres charge up to $50 for a 10-week term and home-based care costs were about $4-6 an hour.

Meanwhile, a 2014 study carried out by BNZ and Plunket found the average Kiwi parent spent about $11,500 a year on childcare.

ECC's Reynolds says it's almost impossible to give an average cost for childcare in NZ considering how much the fees and services vary.

IS IT DIFFERENT FOR COUNCILLORS?

In a word, no.

Councillors are technically self-employed so they don't get annual leave, sick pay or a KiwiSaver subsidy from the council.

However, when it comes to childcare, they're in the same situation as most other Kiwi parents.

They aren't remunerated for childcare costs but this is standard across most Kiwi businesses and government organisations.

They are entitled to the same central government childcare subsidies as every other Kiwi parent.

In 2012 the government scrapped childcare tax credits, saying they were no longer fit-for-purpose.

With the introduction of 20 "free" hours childcare and Working For Families, the tax rebate was no longer needed, Peter Dunne said in 2012

This means a small perk available to people like McLean is no longer available.

ECC's Reynolds says he was against the government dropping the rebate, especially because it was done without consultation.

HOW DOES GOVERNMENT FUNDING WORK?

Strap yourself in - ECE funding is a complicated beast but let's take a look.

The Government was forecast to spend $1.7 billion on early childhood education funding for the 2016 financial year.

The Government has a universal subsidy for every child that attends any Ministry of Education-approved childcare service.

On top of that, there's a targeted subsidy for children aged 3-5, known as 20 free hours. Every child is eligible for this, no matter the parents' income or situation.

The name can be misleading, as the childcare providers can charge extra fees, meaning some parents have to top up the subsidy with their own money.

It's important to check whether your ECE provider has signed on to the government's 20 hours before enrolling, as not all ECE providers choose to be part of the scheme.

Work and Income subsidies are also available for low-income families, parents who are studying or work shift work, among other criteria.

New Zealand Educational Institute (NZEI) and ECC say the government's ECE funding freeze over the past six years has put extra financial strain on providers, which is largely being passed on to parents or resulting in increased teacher-to-child ratio.

In the past centres with 100 per cent qualified teachers had further government funding. This has been scrapped, meaning those that want to continue to employ 100 per cent qualified teachers (rather than the 80 per cent funded by government) need to find the money from elsewhere.

While the overall amount of government funding has increased over the past six years, it was only due to increased participation levels.

Funding had not kept pace with inflation, and there hadn't been further investment in innovation in the area, according to ECC and NZEI.

The Green Party has proposed extending the 20 subsidised hours to include 2-year-olds.  

NZEI executive council childhood representative Virginia Oakly says the organisation is also part of the 26 For Babies coalition.

"The incremental increases to paid parental leave have been welcome, but we want to see parents being able to stay at home and bond with their babies for at least six months before financial pressures force them back to work."

SHOULD EMPLOYERS BE CHIPPING IN?

Hurunui District councillor McLean thinks the council should reimburse her for childcare costs and some agree with her.

Oakly says quality education for all children, including under-5s, is a public good that should be funded by the central government to enable equitable access for every family.

"However, employers that offer flexible, family-friendly working arrangements will benefit from a happy workforce and being able to attract skilled applicants who also have young children," she says.

ECC's Reynolds echoed that sentiment - while the funding burden should not sit with employers, there's nothing wrong with businesses being creative and flexible by setting up family-friendly arrangements, including creches.

HOW DO WE COMPARE TO OTHER COUNTRIES?

A new OECD report has found New Zealand is one of the most expensive countries to raise a preschooler.

New Zealand was only behind the UK in terms of childcare costs, with two-parent families spending 29 per cent of their incomes on their preschoolers' daycare, according to the report.

NZEI's Oakly says the figures speak for themselves.

"It certainly doesn't help that our early childhood education system is increasingly being run by for-profit operators.

"They have to deliver a profit to shareholders while also dealing with government funding falling behind inflation.

"Naturally, parents are going to end up carrying the cost," she says.

However, the Government and ECC say the report is flawed.

Minister of Education Hekia Parata says the comparisons were not fair. The analysis ignored New Zealand's 20 "free" hours.

ECC's Reynolds agrees, adding that New Zealand's childcare costs were sitting about the OECD average.

IS CHILDCARE A BARRIER TO WOMEN RETURNING TO WORK?

NZEI's Oakly says the cost of childcare is a handicap for women wanting to return to work.

For many women, going back to work is not financially viable unless it is well paid and/or they have family support with childcare, she says.

"Often parents need to return to work to make ends meet at home...The costs often consume a good part of the income they are working hard to earn."

SCARED INTO SELF-EMPLOYMENT

Manawatu mother Heather Welch says our childcare model and options are a barrier for women returning to work.

Welch returned to work a year after having her daughter Bethany (almost four) and found the daycare options overwhelming.

The paperwork to apply for a Work and Income subsidy was challenging, the costs were high and there were a lack of options near where Welch lives in Pohangina.

In the end, Welch decided to become self-employed and now works as an Avon representative, as well as helping run the family business.

Welch says she became self-employed due to being "driven from a fear or not being able to get accepted for a traditional job".

Bethany is now enrolled in a correspondence course through Te Kura in Wellington. It costs $90 a year and the family receives monthly resources and activity bundles, which can be completed from home.

FORCED TO STRUGGLE FOR TWO YEARS

Palmerston North mother Katy Aldcroft says she initially made the decision to return to work for her "own little piece of life" rather than money. At the time she was living in Australia and paying $260 for four days of care.

When she moved back to New Zealand she had to continue working and found a daycare that offered five days' care for $267.

She didn't think anything of the cost until a life insurance consultant pointed out they were paying $13,000 a year for childcare.

Evie then changed to the not-for-profit Wananga Preschool, which charged $140 for a full week ($3.50 an hour). Once she turned three, Evie qualified for 20 "free" hours, bringing weekly costs down to $70.

Evie's now at school and after-school care is even more expensive.

Aldcroft is expecting her second child and having serious thoughts about when and how she will return to work.

"Financially, we wouldn't be any better off and it's actually something I've never understood." 

The government wants parents to return to employment and you have to make a decision after 12 months due to maternity leave arrangements but the assistance from government doesn't really kick in until children are three.

"So there's essentially two years where you have to just kind of struggle," she says.

Stuff

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