Deputy Noel Ahern put his finger on the problem and the delicate way it must be approached. Different types of services are being provided in the manner he has described. We must try to provide more cr�ches and to ensure they are properly regulated. As Members know, Leinster House will have a cr�che later this year. Many people have reservations about cr�ches. Sending a child to a cr�che is one way of getting parents to immunise them against every known childhood disease, such as mumps, measles, etc. Parents for many reasons, including convenience, are happier if the woman across the street looks after their child either in their house or in her house.
It is a separate question as to whether we should use the tax system to facilitate, encourage or fund this activity. We have studied this issue before because we have had repeated requests for such a facility. Should we make a distinction between a couple who makes a conscious decision for one of them to give up work outside the home to provide parental care inside it because they do not get tax relief, or should there be tax relief for the mother who stays at home as distinct from the person who goes out to work? We are assuming that mothers are the only people who stay at home, but that is true in 95 per cent of cases. How does one put equity back into the system and do we want a Murphy mark two type judgment in our tax system?
We have two recommendations. First, the tax strategy group, of which Deputies will be aware, represents the different sections in the Government and the officials from the Revenue Commissioners and the Department of Finance who study various taxation proposals. They could not reach a consensus on the issue we are discussing for the reasons I outlined. Our expert in-house group studied this in great detail but we were not able to come up with an agreement on the way forward.
The other group which looked at it was the Second Commission on the Status of Women. It did not recommend that tax relief for child care expenses should be given to working parents. The commission considered it was preferable that any additional assistance for child care facilities should be provided through increased investment in child care support and services rather than providing tax relief. The reasons it gave were that tax deductibility would do nothing to increase either the supply or the quality of child care workers or improve training; tax deductibility was of no use to anyone with no or relatively low income; it would be worth more to high earners than to low earners; and the people who need to go to work to supplement their income might not have the level of income to benefit from the tax deductibility.
As regards the black economy, many people would not come into the pale grey or white economy if they were required to declare what they were getting from the young parents across the road. We had experience of this in the past when Mr. George Colley was Minister for Finance and Professor Martin O'Donoghue proposed a series of tax reliefs for home improvement works. The assessment in the Department of Finance and the Revenue Commissioners was that the tax deduction provided a two price mechanism in the market. There was one price if it was in the black economy, but there was a higher price if it had to be declared. There was a discount in the system as a result of that. The black economy does not appear to have been wiped out on the home improvement side, although the information is limited.
We have a growing problem in this regard. Anyone I have asked to look at this situation from the tax point of view has mentioned all the issues about which we have spoken. They also said that an argument, which could be reinforced by a legal claim, is that a person who had a job and who decided to stay at home for a period of time to mind his or her children could claim the same benefit, the cost of which could be substantial. Countries which have high levels of female participation in the workforce, such as Scandinavia, have managed to do so through structured and freely available, in geographical terms, child care services and facilities.
I was initially favourably disposed to this approach and my instinct is to support the childcare system and make it accessible. Perhaps it could be fee based, in order to give some State support for its provision, and some type of tax allowance could be provided for the person who avails of it. The entire matter is then in the white economy in a much more accountable way. This would address some of the problems mentioned by Deputy Ahern, such as unauthorised cre±ches. Deputy McDowell will recall one in particular which went to the wall when AnCO tried to establish it close to its place of operation. The area is a minefield. It starts off as a simple, good idea, but it becomes immensely complex when one begins to peel off the onion layers. For this reason I am not in a position to accept the amendment.
