New Zealand’s PM Ardern unveils childcare subsidy in cost-of-living package

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New Zealand Prime Minister Jacinda Ardern announced a cost-of-living package for families battling surging inflation, and she warned that 2023 will be more difficult “in many ways than this year.”

More than half of New Zealand’s families with children will become eligible for subsidized childcare assistance from April 1, including all sole parents, Ardern said. The government will spend NZ$189 million ($112 million) to increase the income threshold for assistance in the program, reversing a freeze imposed in 2010.

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More than 10,000 additional children will be eligible for support, the prime minister said at a Labor leader’s party conference speech in Auckland Sunday.

The announcement comes as Ardern’s Labor Party faces the prospect of a by-election in coming months after rebel member of parliament Gaurav Sharma announced he is resigning. A by-election will be a test of Labor's support ahead of the next general election, expected to be held in late 2023.

“Front and center right now, we have the extraordinary challenges of a cost-of-living crisis, global in origin but affecting many Kiwis,” Ardern said. “Right now, the load for families across New Zealand is a heavy one, and while there are many pressures, we know childcare is the biggest in-work expense for families.”

The policy means a family with two parents both working 40 hours per week on NZ$26 per hour with two children under five will now become eligible for NZ$252 per week from April 2023.

Ardern said New Zealand women cannot afford to work if they want to because of childcare costs and they are forgoing NZ$116 million or more in wages every year.

“This barrier to work exacerbates a workforce shortage, but more than that, it removes the ability for many New Zealand families to choose what’s best for them,” she added.

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