I propose to take Questions Nos. 109 and 110 together.
I understand that comprehensive analysis of the options to support the provision of affordable and accessible childcare was undertaken in 2005.
Having considered the options available, the then Government introduced the early childcare supplement, providing a direct payment to all families with young children. In addition, certain other incentives were introduced in order to encourage an increase in the supply of childcare places.
At that time, tax relief for childcare costs was considered but not introduced, as it would only have been of benefit to those in the tax net and would most likely have been absorbed by childcare providers in the form of higher prices. Analysis showed that a standard rated childcare costs allowance of €4,000 per annum would cost the Exchequer €64 million per annum and would have resulted in a reduced liability to income tax of only €15 per week for those availing of it.
The Deputy will be aware that the early childcare supplement has since been abolished as the measure was very costly, poorly targeted and possibly led to increased charges. In its stead, the Early Childhood Care and Education (ECCE) programme, which provides for a free pre-school year for children in the year before commencing primary school, was introduced.
In my view the concerns raised in the 2005 analysis regarding tax relief for childcare costs are still valid. This is particularly the case considering the major changes in the economy that have occurred in the intervening period. Furthermore, I would have concerns about basing any analysis of the cost of making childcare tax deductible on data provided in reports that were compiled five years ago.
To allocate already stretched resources to complete the analysis requested would not, in my view, be an efficient use of these resources. This is especially the case where it is likely that the cost of such a tax relief would be prohibitive for the State at the current time. Furthermore, I am not in a position to release funding to you for the commissioning of such an analysis. Requests for expenditure might be more appropriately addressed to the Minister for Public Expenditure and Reform.