Welcome to our latest story on the cost-of-living crisis. With New Zealand having some of the highest childcare costs in the OECD, some women are making the difficult decision to have only one child rather than the two they wanted. Heck, some are even moving to Australia. We speak to Kiwi families who can’t afford to have a second child – and how they’re either moving countries to do so, or moving on.
Auckland graphic designer Kirsty*, 34, originally wanted to have four children. “I have three siblings and mum stayed home with us until my youngest brother was five, but that was regional New Zealand when generally you could live fairly comfortably on just one salary.”
‘I never thought I’d be priced out of having a second child.’
In her 20s, Kirsty decided that three children would be enough. By the time she and her husband got married in their early 30s, they decided having two children was more sensible. Their son is now two.
Kirsty took the government’s paid parental leave of 26 weeks then returned to her job. “I managed to work pretty much full-time, flexibly and hybrid, and had my son in daycare part-time. But I was tired beyond belief, so we put him in daycare fulltime.”
They’re paying $430 a week for his place in an Early Childhood Education (ECE) Centre in central Auckland. Even when he turns three and gets 20 government-funded ECE hours a week, they’ll have to pay for the other 20 or so hours. They don’t qualify for National’s FamilyBoost, a childcare tax-rebate scheme, as they earn just above the $180,000 threshold.
“We’re lucky to earn what we do, but with the crazy costs of childcare, and the cost of being out of the workforce, we just can’t afford a second child. I’ve sort of accepted it, but sometimes it does break my heart a bit.”
Kirsty says her son’s ECE centre and his teachers are wonderful. “But I also wonder, why is childcare this expensive? I never thought I’d be priced out of having a second child.”
Those Who Can’t Afford A Second Child
New Zealand’s childcare is amongst the most expensive in the OECD (which we’ve done an in-depth story on here). Here, 37% of a couple’s average earnings go on childcare. Yes, really. It’s not uncommon for parents to spend $400-plus a week on childcare for one child, or $800-plus for two: a large proportion of the income of a couple both earning decent salaries, and a HUGE proportion of the income of a couple not earning as much.
That’s despite the government funding 20 ECE hours for children aged three and over. Labour campaigned on extending that to two-year-olds. If Labour had been elected, and fulfilled that promise, that would have saved families, on average, $133 a week.
Meanwhile, National’s campaigned-upon FamilyBoost scheme now provides some families with a tax rebate for up to 25% of childcare expenses, for up to $75 a week. The key words here are ‘up to’. Many families don’t qualify as the threshold is $180,000, and some families who do qualify get as little as $19 a week. There’s also quite a bit of paperwork involved.
Moving To Australia To Have Another Child
Becca*, 28, never thought she’d have to leave the country to afford a second child. She and her husband, together since they were teenagers, always wanted two children. Her husband is a full-time tradesman. Generally an administrator, Becca isn’t currently in paid work – partly to spend time with her two-year-old, and partly because childcare fees are “exorbitant”. “If I was working,” she says, “and my daughter was in childcare, it’s so expensive that we’d only break even moneywise.”
Money is so tight that they’ve been living with Becca’s parents for eight months. Should they get a rental, they’ll only get a $50 accommodation supplement from WINZ because of the region they live in. As for National’s FamilyBoost scheme, Becca doesn’t think it’s worth putting her daughter in childcare only to receive a small amount of money as a tax credit. “Also, we’d have to pay for the childcare first then present proof of costs. We can’t afford to front the costs and we can’t afford to be stuck with them. And that doesn’t make up for the government not providing 20 ECE hours for children aged two and under [which Labour promised].”
“We want another child. We want a sibling for our daughter, and we don’t want to wait till she’s 10. But we just can’t afford to have another kid living in New Zealand. Paying childcare for two children wouldn’t be possible.”
So they’re moving to Melbourne. “In Australia, on average, groceries, gas, and childcare are cheaper. The wages, on average, are higher. House deposit amounts are lower.” They’ll start trying for a second child as soon as they find a rental and her husband gets a job. It’s heartbreaking for her to move so far from her parents, who are close with their granddaughter.
The Myth Of Family Help
Childcare is also very expensive in the U.S, where 32% of a couple’s average earnings go on childcare. Continuously tone-deaf Vice-Presidential nominee J.D Vance recently said “one of the ways that you might be able to relieve a little bit of pressure on people who are paying so much for daycare is maybe Grandma and Grandpa [want] to help out a little bit more, or maybe there’s an aunt or uncle that wants to help out a little bit more”.
Er, J.D., many grandmas and grandpas (if they’re alive) don’t live in the same town, still have jobs, or simply are done with looking after children – and fair enough too. Aunts and uncles also have their own lives.
IT consultant Jess and her husband, whose son is two, don’t have other family members in Wellington. “I really want another child but we can’t afford it,” she says. “High childcare fees are a major factor.”
Jess, 35, had six months at home with her son before she had to return to her job. He had to go to an ECE centre. “I felt that was too soon.”
Now she has the opposite problem, having lost her job. “We’ve reduced his [childcare] hours, and we’re looking at reducing them more.” Jess doesn’t want to remove him entirely from the centre he loves, and she needs that time to look for and apply for jobs.
If she hadn’t been laid off, she’d still only be having one child. “We were paying $360 a week for childcare, and struggling to pay the mortgage, and other bills, even though our household income was $200,000.”
“We have no savings anymore, no safety net. Having a second kid would be too expensive. It’s a shame because I really want a second child. And I want my son to have somebody when we’re not around anymore.” Her three siblings, and her husband’s sister, aren’t having children. “I’m sad that my kid won’t even have cousins.”
What would she like the government to do? “Well, some people think mothers can stay at home with a baby for a whole year, but financially, most of us just can’t. I remember that the hardest period of motherhood was six months to one year, when you’re back at work but so tired. I’d like to see government help financially throughout that first year, and ideally throughout that second year.”
Can the childcare crisis be solved?
In a NZ Herald story, Nikki Parsons – Early Childhood New Zealand’s General Manager: Learner & Workforce – said “the rising costs were caused by the increasing cost of living, red tape, teacher shortages and a broken funding system”. Parsons said the Government should provide more funding so prices would stop increasing for families.
In a Newsroom article, Dr Sophie Moullin, a University of Auckland sociologist, argues that extending government childcare subsidies “will not address the childcare crisis for families”.
In a group webinar called “Why is Early Childhood Care and Education so unaffordable and inaccessible?”, Dr Moullin describes how, in other nations, the government invests in early childhood education as an expanded part of the current education sector. She argues that schools already have the kind of infrastructure needed to recruit teachers and provide high-quality education – and that this would keep costs lower for families than profit-driven private childcare.
Tara*, her partner and their two-year-old son are relocating to Australia permanently to pay less in childcare, and earn higher salaries. “Childcare fees played a big part in our decision not to have a second child here.” They won’t have a second child there, either, to get ahead financially.
‘I found it odd that the decision-maker for having another child was financial. I didn’t expect that.’
Ideally, they’d be living in New Zealand with two children by now. But they’re currently paying $410 a week for childcare, and can’t afford double that. “$410 is such a big portion of our income that I’m essentially working for free for a big chunk of the week. Add mortgage payments and we’re scraping by. I’m 38, and I thought that, by this period of my life, I’d be hitting more goals financially. I found it odd that the decision-maker for having another child was financial. I didn’t expect that.”
