Sticks and carrots to promote dual income families

At the Iona Institute’s family policy conference late last month, we heard Jonas Himmelstrand’s sometimes jaw-dropping description of Swedish family policy.

It was interesting to hear, on the one hand, how government policy and media so strongly promote the Swedish model of full-time daycare and full employment for parents as early as the child’s second year.

We heard how at healthcare checks, parents of toddlers would be rebuked if their toddler was not in daycare, and told that research clearly showed it was necessary for proper development. Any public suggestion that the model leads to problems is met with a very vocal negative response.

Yet, on the other hand, Jonas told us that the majority of Swedish families are quietly dissatisfied with the system, and there is almost universal recognition of problems with the quality of daycare. Furthermore, educational results fail to live up to the massive financial investment.

But what does that matter here? It’s not like that here, after all. I’m a professional career woman but nobody has ever (yet) tried to persuade me that I’m hampering my toddler’s growth by mostly caring for him myself.

Let’s look at our tax system, though. Dual income married couples have a higher standard rate tax band than single income married couples, so they pay up to €5,000 less tax per year.

Yes, there are childcare fees. But if the government was attempting to make childcare more affordable for parents who both wanted to work, it must have failed to notice that families with joint income under €41,800 don’t benefit at all. Or could it be that higher earners provide more income tax (or more votes)?  Also, childminders can earn up to €15,000 per year, tax free.

It seems the previous government, in spite of unemployment and cutbacks, was still happy to invest millions in encouraging both parents to take paid employment, and in childminders caring for others’ children to facilitate this. Surely single income couples, in which a parent cares for his or her own children at home, deserve better value than being relegated to the home carer’s tax credit: a token €810 per year.  

Actually, maybe we are not so far from Sweden in some ways. Our own tax policies heavily favour dual income families, to the expense of parents who choose to maximise their time with their own children. Let’s hope the next Budget brings more fairness and common sense.