'Substantial' cut to childcare costs to form part of October budget

Coalition will seek further measures to help parents, along with Core Funding which has yet to fully impact childcare costs

Public Expenditure Minister Michael McGrath must deal with a totally different world economic scenario than he did two years ago when preparing for Budget 2021. Picture: Moya Nolan

A “substantial and visible” cut in childcare costs will form a key plank of the Government’s attempts to woo voters in October’s budget — but no proposals have yet been formalised.

The Government is eyeing ways to cut the cost of living in the budget, and departments have been asked for plans which would do so in a “real way”.

The cost of living crisis is expected to play a central role in the Government’s budget plans, particularly in the wake of strong polling for Sinn Féin in recent weeks.

Senior Fine Gael sources say the party will look to increase the universal subsidy in the sector, but added that a targeted approach may be examined by Coalition partners.

A Fianna Fáil source said “all parties want to tackle the cost of childcare, but nothing has been brought to [Public Expenditure Minister] Michael McGrath yet”.

The same source said the €221m core funding scheme has “yet to hit the sector” and that while that announcement was focused on recruitment and retention of staff, it included a commitment to freeze fees.

Childcare is to be looked at “in its entirety” and other moves which could cut the need for childcare including measures around remote working will be examined, as well as the expansion of early childhood care and education programme (ECCE) hours for children.

However, one potential sticking point is capacity in the sector, as reducing costs could lead to increased demand for places, which are already at a premium.

While the Government’s objective is to allow people to return to work by removing the cost of childcare as a barrier, an immediate spike in demand will be “tricky” to cope with.

The plan needs to offer “real cuts” to the cost of many aspects of life, not just food or fuel, sources say. To that end, they say, the coalition is looking to cut costs in childcare, healthcare, and third-level education as a priority.

However, all are reluctant to put approximate savings on the proposals just yet with the budget still four months away.

That has not stopped the coalition partners setting out their priorities early for Taoiseach Micheál Martin’s last budget in charge.

Fine Gael sources say they are aware that Tánaiste Leo Varadkar will be Taoiseach for most of the implementation of the budget. Therefore, they admit they are keen to “make sure there are Fine Gael fingerprints” on the budget.

The party is said to be demanding that Budget 2023 includes income tax, pension, and welfare measures.

That is in spite of the fact that some in Fianna Fáil have cautioned against any measures which might contribute to inflation.

On Tuesday, the Dáil will debate a Sinn Féin motion which would deliver a payment of €100-€200 to provide support for people hit by spiralling costs.

Sinn Féin spokesperson on social protection, Claire Kerrane said the payment is needed “urgently”: 

No one should ever face the choice between putting food on the table or paying an essential bill. It should shame us all that people are under such pressure while the Government fails to act.

“The Government must act now to support ordinary workers and families," she said, adding: “Sinn Féin will bring forward a motion in the Dáil tomorrow to deliver a cost of living payment to people.”