Early childhood centre owner rejects claims Government's tax rebate could cause price gouging

  • 26/03/2024

An early childhood centre owner has shot down questions over whether the Government's childcare tax rebate could result in centres upping their fees.

The Coalition Government announced on Monday it is moving ahead with National's FamilyBoost policy from July 1.

Under the policy, all families earning up to $180,000 will be eligible for a 25 percent rebate on their early childhood education (ECE) expenses, up to a maximum of $75 per week.

The full $75 per week would only be available to those earning up to $140,000 and spending $300 per week on childcare. The rebate would then gradually reduce, with, for example, a family earning $170,000 receiving $18.75 per week.

Appearing on AM on Tuesday, New Shoots Children's Centres director and co-owner Kelly Seaburg said the support will be welcomed by both parents and early childhood providers.

"Parents are definitely doing it tough, like everybody in New Zealand, so I think any support for parents is going to be brilliant," Seaburg told co-host Lloyd Burr.

When asked whether the policy could result in some ECE's putting up their prices, Seaburg said she doesn't believe that will happen.
She said the scheme will have a variable benefit to families depending on their income so it wouldn't make sense for ECE's to make a universal price increase as they won't know what the benefits will be to every family.

Seaburg added there will always be normal fee increases to reflect rising costs such as salaries, rent, food and nappies.

"I don't think we are going to see any crazy increases," she said.

Appearing on AM earlier on the show, Prime Minister Christopher Luxon said the vast majority of ECEs want to ensure parents get the subsidies and support they need.

"We have a very competitive ECE market. If ECEs were to gouge and take their prices up, they [parents] will move," Luxon said.
He added the Government will be monitoring data on the fees being charged around the country.

Early Childhood Council CEO Simon Laube said on Monday the Government's announcement was a welcome relief, however, expressed concerns that non-fee centres could introduce fees to capture Family Boost payments.

In response to this, Seaburg while it's possible, there are a lot of non-fee centres that have a philosophical reason as to why they don't have fees.

"I think we just have to allow each service to really make their own decisions depending on what their environment is," she said.

Seaburg said the changes are a good step to support parents in the meantime, while the sector pushes for a broader funding review. She said she has heard a funding review is being "openly considered" by the Government.