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Revised 20 free hours policy better, still flaw

22 August 2005

Labour’s revised ‘20 free hours policy’ better but still flawed

The government's decision to extend the weekly '20 free hours' of early childhood education (ECE) to all 3 and 4 year olds at teacher-led centres is a step forward, but the policy remains flawed, says Education Forum policy adviser Norman LaRocque.

Prior to today's announcement, only three and four year-olds at community-owned centres would have been eligible for the subsidy, which is to take effect from 2007, and 25,000 children at ‘private’ centres missed out.

Parents at ‘private’ centres will no doubt welcome the additional subsidy and these centres will welcome the fact that they will be able to compete on a level playing field with community-owned centres, said Mr LaRocque.

Despite this change, the policy remains flawed. A key weakness is that it caps the amount that centres can charge for those 20 free hours. This does not recognise that different services have different cost structures and could force ‘high cost/high quality’ centres to either reduce quality or find other ways of raising revenues – such as increasing non-regulated fees – to cover the shortfall, said Mr LaRocque.

A better policy would be to continue funding ECE services according to enrolments and allowing centres to charge fees on top of that. Such a policy would allow parents to choose the appropriate quality level they desire, rather than having it determined through regulatory fiat. If any additional ECE subsidy is deemed appropriate, it should be targeted to those most in need, rather than being provided across the board, said Mr LaRocque.

Middle class parents do not need more government hand outs. Tax cuts would provide them with the freedom to decide how best to structure their own child care arrangements, concluded Mr LaRocque.


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