Are childcare centres exploiting govt schemes?

Andrew Loh

Fees for childcare services have been in the news lately. And it is no wonder why. Operators have either increased their charges or are thinking of doing so. These centres include not only privately-run ones but also those run by the PAP Community Foundation (PCF).

The Today newspaper reported in July 2008 that some 1,500 students attending the seven PAP Community Foundation (PCF) kindergartens in Woodlands will see their fees shoot up by 30 to 100 per cent from July.  Minister for Community Development, Youth and Sports, Dr Vivian Balakrishnan, defended the increase. He said, “If you want better services, you want more convenient services, there will be inevitably some increase in cost, which the operators will also have to cope with.” (Straits Times)

The Today report also said:

Woodlands kindergartens in Blk 601 and Blk 875 will hike monthly fees from $50.90 to $110 per child because they will be air-conditioned. Air-conditioned kindergartens in blocks 899B, 652 and 824 will increase fees from $86.60 to $110, while non-air-conditioned ones in blocks 624B and 853 will hike theirs from $50.90 to $95.

Nurseries run by PCF Woodlands will also see a $20 to $30 monthly fee increase from July.

This year, many parents have been informed that their childcare centres are upping their fees again. This prompted Dr Balakrishnan to urge operators to keep fees “affordable”. “Given this benefit and the economic downturn, childcare centres should play their part in ensuring the affordability of childcare services for our families and children,” he said in Parliament on February 2009.

The first question one would ask is: Why did the minister defend the PCF’s raising fees while urging private operators to “refrain from increasing their fees”? (Straits Times)

Perhaps the reason is that the Jobs Credit Scheme (JCS) has since been introduced. The JCS gives cash grants to employers to help lower the cost of hiring local workers. They get up to $300 a month for each worker. This, however, does not seem to stop employers from raising their charges. One school is reported to be increasing its fees by $70 in April.

With Singaporeans trying to cope with the economic downturn, it would seem that subsidies by the government may be the excuse businesses use to raise fees. After all, with all these generous subsidies, parents should be able to afford the charges.  Indeed, this was what Dr Balakrishnan seemed to have said in September last year, that the significant increases in subsidies should be enough to offset any fee hike.

Prime Minister Lee Hsien Loong had announced, in his National Day Rally speech in August 2008, a doubling of monthly subsidies for working mothers from $150 to $300 a child. Infant-care subsidies went up from $400 to $600. This was part of the Enhanced Marriage and Parenthood Package (EMPP).

The EMPP “seeks to foster an overall pro-family environment in Singapore through a broader range of measures that offers greater support in both financial and non-financial areas,” according to the Ministry of Manpower website.

On 20 March 2009, the New Paper reported:

Last September, The Sunday Times reported that a month after higher childcare subsidies were announced, 17 of the 20 childcare centres it contacted indicated their intention to raise fees by $30 to $120 a month.

According to an MCYS spokesman contacted by the New Paper, since childcare centres are private businesses, they can increase fees at their own discretion. They need only inform MCYS and the parents of a fee revision at least two months before the implementation.

One wonders what the purpose of informing MCYS is, if the ministry is not able to do more than keep track of the increases in fees.

Prime Minister Lee Hsien Loong’s announcement of the Enhanced Marriage and Parenthood Package last year was aimed at getting Singaporeans to get married and have children. It was welcome by many parents who saw it as the government shouldering part of the financial burden of raising children.

However, the seemingly indiscriminate raising of fees by childcare centres may be discouraging would-be parents from having children. It also may be a sign that businesses are exploiting the government’s well-intentioned subsidy schemes aimed at helping businesses stay afloat during these bad times.

It is hard for one to understand how with the EMPP and the JCS in place, childcare centres would still need to increase their charges, some by very significant amounts.

Obviously, something is wrong somewhere.


Picture from Straits Times.


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