Childcare reform key to greater female participation in workforce: two-thirds of members pay up to €2,000/ month for childcare
Workers need certainty in tax system to reflect hybrid working norms and bring an end to pandemic experimentation period.
5 January 2024 – Stronger government action to improve childcare costs and availability would boost capacity in the workforce, according to a new policy paper published today by Chartered Accountants Ireland. The Next Financial Year: Building Capacity is the first of several policy papers that the Institute will publish this year on priority areas identified by Institute members which would support the economy.
The Institute is the largest and longest-established professional accountancy body on the island of Ireland. It has 33,000 members, two-thirds of whom work in business. Published as an open letter to policymakers and legislators, the policy paper sets out recommendations on how Government can build capacity in the economy by:
- Enabling greater female participation in the workforce through targeted childcare reforms
- Easing cost pressures for developers & landlords to stimulate housing supply
- Giving certainty to workers on place of work & commuter costs in the tax system
- Building digital capabilities & resilience for businesses to succeed
Childcare reform can unlock economic contribution of female professionals
Institute members identified the steep cost and lack of availability of childcare as the biggest challenge facing working parents in the profession today, with two thirds of members currently paying up to €2,000 per month in childcare costs, and 16%, mostly female members, having to reduce their working hours to care for a child.
Chartered Accountants Ireland highlights solutions available to Government to increase female labour market participation such as:
- Increased funding, capital investment and grant support to the sector to better match the cost of providing childcare services, to meet surging demand for places & to encourage providers to grow.
- Reform of National Childcare Subsidies (NCS) to encourage childminders to register with Tusla, giving parents of up to 80,000 children easier access to subsidised childcare.
Sinead Donovan, President of Chartered Accountants Ireland, said:
“For too long, policymakers have framed childcare policy as a social issue, not an economic one. Our evidence shows that affordable, quality childcare drives more sustainable, inclusive economic growth and competitiveness. Government’s ambition to tackle the provision of childcare is welcome for businesses in today’s tight labour market. Paving the way for greater female participation in the workforce should be a priority for policymakers in 2024.”
On housing, the policy paper identifies specific measures to ease cost pressures for developers and landlords to stimulate supply, including:
- A deferral of PAYE and VAT payments for developers and builders on salary, material, and other costs incurred during construction, to be payable as the units are sold. This would reduce development costs, ease cash-flow concerns and make investment more appealing.
- Further encouraging private landlords to remain or move into the Irish market through the taxation system. Allowing Local Property Tax as a deduction against rental income and allowing non-resident landlords to collect rents directly from tenants, rather than through Revenue or a collection agent, could provide such an incentive.
In the workplace, giving certainty to workers on how their place of work and commuter costs are to be treated in the tax system would put Ireland’s employment environment on a more progressive footing, and bring to an end the pandemic experimentation period. Measures proposed include:
- Introducing a more flexible version of the TaxSaver Commuter Ticket Scheme, to offer tax relief on season tickets to commuters who only use public transport 2-3 days a week, reflecting new norms around hybrid working, while promoting public transport use.
- Rules to establish a normal place of work, fundamental to the tax treatment of employee travel and subsistence reimbursements, should be updated to reflect the changed circumstances that hybrid working has created.
Digital skills are essential to meet current and future workforce needs. Building digital capabilities & resilience for businesses to succeed requires Government to do more to meet its target of 80% of adults having at least basic digital skills by 2030. The Institute recommends that the digital transformation of education and training focuses on schools, equipping children with the skills needed for the jobs of the future, underpinned by the Digital Strategy for Schools to 2027.
Dr Brian Keegan, Director of Public Policy for Chartered Accountants Ireland, said:
“In Building Capacity, Chartered Accountants Ireland has put forward practical recommendations to help our economy thrive. Our members have once again provided vital insights into the major societal and economic challenges that both businesses and employees are facing. Our recommendations reflect their experiences and realities.
“We welcome Government engagement with many of our policy proposals in the last year, but more needs to be done. Building capacity in our economy does not stop at the bricks and mortar of much-needed housing supply. It must include targeted measures that actively facilitate women who want to work, and reflect the reality of a more dispersed, and digital-first workplace if businesses are to succeed long-term. It is within Government’s gift to put in place measures to increase economic capacity across the board, and futureproof jobs for generations to come.”
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