Wednesday, June 13, 2007

20 hours free: an election promise that is an indirect tax

Childless Minister of 20 hours free childcare, Steve Maharey, said in the House today that 20 hours free child care will be free for 20 hours - but implied that is likely to cost more than zero dollars. Confused?

Well, the child care is free. It really is - the Minister said so, so it must be. It's just the parents will have to pay for associated extra overcharged services which are explicitly designed to incur these extra charges. Child care centres that are opting into this scheme can't afford to offer 20 hours free with the crap Govt funding they are going to get, so they intend to overcharge for add-ons so they can take up this underfunded government policy.

It's the first election promise I know of that is actually an indirect tax - and funded through tax in that it is paid by parents from money they get from their Working for Families money.

Labour's tax - well its actually a levy - will be initiated by administrators rather than the policy makers and the extra services like trips are to be created at minimal cost to pay for the government funding shortfall. Maharey believes these "extra services" are not part of the 20 hours free, they are just added on when you take up the 20 hours free.

So the Government promises something to get elected, gets elected, then announced how the election promise is underfunded, then refuses to compensate for those intending to charge extra. Gosh, its worse than announcing a 67 cent tax cut in one budget and reversing it in the next.

This policy advertising push is similar to when a certain airline was pinged when it breached advertising standards when it promoted and advertised cheap flights without stating that there were extra costs associated with these cheap flights that they did not reveal.

Likewise, it will be difficult to get your kids into free childcare unless you are prepared to go to a childcare centre who offer extra services that you have to pay for - but you may not end up finding out until you are hooked up and the centres start charging. The Govt does not breach advertising standards when advertising 20 hours free as it doesn't directly administer the extra charges - it merely doesn't stop them happening, while at the same time being two-faced in its disapproval of those who intend to charge.

1 comment:

Anonymous said...

I always thought that guy wore Teflon.
well now we know, right through to his underpants!