Childcare costs like a second mortgage for many workers, Varadkar says

Tánaiste Leo Varadkar has issued the strongest signal yet that next week's budget could include measures to help families with the cost of childcare.

Mr Varadkar on Friday confirmed the issue was being examined ahead of Tuesday’s announcement. He noted how such costs amount to a second mortgage for many parents and can be a barrier for some seeking to return to work.

No measures to help with the cost of childcare were introduced in last year's budget but Minister for Children Roderic O'Gorman earlier this week said he hoped to make changes to the the National Childcare Scheme (NCS) next year.

Under the scheme, there are universal subsidies of up to €22.50 per week or higher, means-tested supports for families on lower incomes.

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Coalition TDs have been pushing for improved childcare support in this year’s budget.

The Irish Times understands that changes to the scheme are being examined as well as the issues of the low pay for staff in the sector and the sustainability of childcare providers’ businesses. Sources said childcare is a “top priority” as Ministers work to finalise the budget.

Mr Varadkar, the Minister for Enterprise, was asked about plans for the Budget during a visit on Friday to Drumshambo in Co Leitrim, where he officially opened the Shed Distillery Experience.

Unable to confirm

He said he could not confirm what would or would not be in the budget at this stage as “there are still some decisions being made”. However, he added: “One of the things, of course, we are going to examine in the context of the budget is the cost of childcare.

“We have made some progress in that regard to this in recent years with the two full years of ECCE (Early Childhood Care and Education Scheme) and the introduction of the National Childcare Scheme.

“But it is still the case that for many people, childcare is like paying two mortgages or like having to pay the rent twice every week.”

The Tánaiste said from an enterprise and employment point of view childcare costs were a barrier to people returning to the workplace.

“We have skills shortage across the economy and many women, particularly women but not exclusively women, can’t get back into the workplace because of the cost of childcare so it is something that the government will address in the years ahead,” he said.

Pensions and welfare

Mr Varadkar also indicated that pensioners were set to benefit from the measures announced in the budget.

He said a big part of the additional €1 billion spend “will be taken up by the pensions and welfare package and it needs to be because of the rising cost of living”.

“We need to see pensioners and others getting an increase, they haven’t got that since 2019,” he said. “I suppose that means money for other new measures is relatively limited.”

Mr Varadkar also said he was sure Minister for Tourism Catherine Martin was fighting for funds for agencies under her remit, which have been badly affected by Covid-19 travel restrictions.

“I’m sure they will see an increase,” he said. “One of the things we are working towards in the context of the budget is an aviation package, that’s one of the things we need to do to get international tourists back to Ireland.

“I think where you will see a big move is on aviation supports, to get those routes back into Shannon, back into Cork and Dublin.”

Tax proposals

Separately, Mr Varadkar criticised proposed tax increases in Sinn Féin’s alternative budget as well as the party’s proposal to get rid of the Help-to-Buy scheme for first time buyers. Sinn Féin argues that the policy has failed and has led to increased house prices.

Mr Varadkar claimed abolishing Help-to-Buy “is further evidence that Sinn Féin doesn’t believe in home ownership” and that “their model is a rent for life model”.

“We’ve seen a proposal to increase employers’ PRSI, a tax on jobs,” he said of the Opposition party’s budget plan. “We don’t see any indexation of tax bands or credits which means that people earning €35,000 would be worse off under Sinn Féin in real terms.”