The Government is to consider proposals for a new €8,000 tax exemption for childminders, drawn up by the Progressive Democrats, as part of the deliberations on next year's budget.
The Progressive Democrats yesterday proposed that childminders who looked after children in their own home should receive a tax exemption of €650 a month on income received.
The party also proposed that the Government relax some official regulations governing childcare.
The Progressive Democrats said that the proposed measures on tax and regulation were aimed at increasing the supply of childcare places and controlling costs for parents.
The new proposals were backed by the two Progressive Democrats members of cabinet, Tánaiste Mary Harney and Minister for Justice Michael McDowell.
Mr McDowell told a PD conference on childcare yesterday that the tax exemption proposal "was being favourably considered in the corridors of Merrion Street".
Earlier yesterday Ms Harney said the proposals would be considered by Cabinet in the context of the budget in December. She said these were PD initiatives, and the party would work in Government to try find agreement on them.
A PD spokesman said yesterday that the proposals were part of the process whereby the party was preparing policies to be put to voters at the next general election. The party's Ministers would also have an input into the ongoing Government deliberations designed to produce a comprehensive childcare policy by the end of this year.
A Cabinet sub-committee on childcare, of which both PD Ministers are members, is considering a range of inputs and proposals from a high-level working group of civil servants, headed by the National Children's Office; the National Economic and Social Forum; the National Women's Council; and individual Ministers. The first steps in the policy are expected to be announced in the Budget in December.
Ms Harney said the "care issue", including care for the elderly, was very much part of the Government's agenda for the autumn.
She and Mr McDowell spoke separately of the potential impact on childcare costs of tax relief for parents. Ms Harney said that such tax breaks could increase prices and that the most effective way to reduce cost was to increase supply.
Mr McDowell said: "If the benefits of such a tax break were to go to the existing suppliers of childcare rather than to encourage more suppliers, we would have spent a lot and achieved little."
He also warned about the potential for such tax breaks to discriminate against women who remain at home.
Under the proposals announced yesterday by party spokesman on education Senator John Minihan, the existing tax break of €8,000 a year made available to homeowners who let rooms in their premises would be extended to the childcare sector.
"We have performed preliminary costings on this and estimate the maximum cost to the Exchequer to be €1,600 for each household availing of the scheme," Mr Minihan said.
He said these figures were based on a single individual taxed at the base rate of 20 per cent.
Mr Minihan said the PDs would like to see childminders allowed to look after five children in their own home, rather than three at present, before they became subject to official regulation.
The party did not envisage any change to the current ratio that childminders could only look after three children under the age of one.
"We don't believe in the nanny state. We want to give parents maximum choice and flexibility," he said.
