Increased childcare costs reveal National's soft underbelly

Labour is going after National on early childhood education costs, and for once actually has the politics on its side and the government on the ropes

Smaug, the mighty dragon in The Hobbit, looked near invulnerable when Bilbo first laid his eyes on him. His hide covered in scales, jewels encrusting his soft underbelly. That’s how National must look to opposition parties right now, and even to other the other parties which have governing agreements with it.

Not that this National government can be characterised as a fire-breathing creature of oppression and evil. But its dominance at the moment does look impenetrable, when even nature in the form of earthquakes and coal explosions gives it the chance to look both strong and compassionate in the public eye. (Too many Hobbit references on Pundit recently? Still, looking at the most read pieces on the site, you guys are up for it; and the metaphor works, don’t you think?)

So all Labour, the Greens, and potentially New Zealand First, can do is chip away at the hide and wait for National to expose any gap in its well-covered hide.

And one of those of soft spots is on display in news today.

Labour has taken to making its own headlines by surveying childcare centres about the possibility of fee increases, and unsurprisingly, the results perfectly suit Labour’s concern that government $280 million of “savings” (over four years) announced in the budget.

While that raises obvious questions about 435 centres Labour questioned, it’s undoubtedly a decent sample out of the 2000-odd centres around the country. And it’s hardly shocking to presume that most childcare centres, faced with a loss of government funding, will wind up charging more at the door.

The survey has found that 89 percent of centres plan to increase fees by anywhere between $2 and $80. Perhaps most worryingly, nearly 60 percent thought participation would drop as a result of the funding cuts. Education Minister Anne Tolley has repeatedly said that increased participation is her goal, so it’s not what she wants to hear from the sector.

This is major soft underbelly territory for the government. In fact, I need a list to spell out the risks. The government’s policy:

  • Takes money off the youngest kids in the country, which is a bit like kicking kittens
  • Increases costs to many household budgets at the start of an election year and at a time when the economy is stalled
  • Puts at risk the women’s vote, which John Key has so ably courted
  • Makes it harder for mothers to go back to work
  • Tells voters that educating their kids isn’t high on the government’s priorities
  • Opens another front in education, where it’s already at war
  • Stands at odds with the Welfare Working Group’s eagerness to get mothers into jobs asap after birth and, more importantly, with Sir Peter Gluckman’s report on adolescence, which is due before Christmas.


That last point is worth drawing out. Gluckman is righteous on child development. He won’t play politics with the evidence, and his report is certain to stress not only the importance of accessible childcare, but just how essential “quality” childcare is.

The government’s funding cuts remove the top two tiers of funding, which will mean fewer qualified staff, especially in poorer areas, to keep costs down.

So it’s already set up for a battle royale between Tolley and Sir Peter, and this concern about rising costs only tosses a few more hand grenades onto the battlefield, making it even more explosive. Which is, of course, exactly what Labour wants.

Tolley is left arguing that “times are tough” and cuts had to be made. Just not tough enough to stop tax cuts for the richest New Zealanders, however. Or tough enough to stop Pansy Wong jetting overseas. Or… you can see where other parties will go with this.

The worst news for Tolley out of this survey is that it makes her look impotent. On TVNZ’s Q+A in September, Guyon Espiner asked her whether costs would increase for the average household. All she could reply was that she hoped not.

In follow up, Espiner asked:

“Do they [childcare centres] have a credible case for increasing their fees?”

Tolley replied, “No, I don’t think so”.

And yet increasing their fees is exactly what the ECE sector is doing; an entirely predictable move. So the minister seems to have cut funding in the "hope" that the centres would wear the cost, in the "hope" that teaching quality wouldn't diminish, and in the "hope" that children's education wouldn't suffer.

Let's get real. The government knew this would happen and made the call - brave, stupid, tough or otherwise.

As the letters start to go home to parents, with centres explaining how the government funding is down by X dollars and so fees will be going up by Y dollars, and the Gluckman report appears, that underbelly will start to show.

It'll be interesting to see how the government tries to deflect the arrows.