From 1 January the national minimum wage will increase and this will also lead to an increase in many other rates. In recent weeks there has been much discussion about the fact that nursery school fees will also increase starting from the new year. Most Estonian municipalities and cities have actually tied the tourist tax to the minimum wage, as allowed by law. In my opinion, this is quite reasonable, because the prices of services are constantly increasing, and with the increase in income, people’s participation in using public services should also increase.
Year after year, however, I realize more and more that, despite the continuous discussions on public finance issues, people do not adequately perceive how much one or another public service actually costs. Unfortunately, most people understand exactly how much money they currently have in their hands or have to pay for the service themselves.
We can compare the funding of a high-quality public service, be it a nursery, a music school or something else, to an iceberg. The consumer only perceives the tip of the iceberg in the form of a ticket. And let’s face it, most of the time even this small part of the iceberg above the water seems unfairly high.
People do not perceive the real price of the nursery service
How much does quality child care really cost? It costs a lot more than it seems on the surface.
The biggest cost is salaries. Not only the group teachers receive remuneration, but also various support specialists: speech therapists, special pedagogues, social pedagogues and psychologists. Furthermore, there are music and gymnastics teachers, administrative staff, catering workers, nursery school managers, municipal education specialists and other personnel necessary to fulfill the requirements established by laws and regulations.
For example, in the municipality of Saue, the salary of a teacher working in the two-teacher system is 1,799 euros, including taxes, the salary cost is 2,400 per month. The teacher assistant’s salary is around 1300, or 1740 euros including taxes. Therefore, at least 6,500 euros are spent on the salary of a group of employees in a month. The cost of all other dependents is calculated equally among all children.
Additionally, the money is spent on educational aids, information technology, and administrative and utility costs. In other words, if we add all these figures, we obtain an expense of 600-700 euros per month per child, and more. Considerable sums are spent on building new nurseries and renovating older ones. Design, construction and furnishing contracts in recent years show that creating a nursery school costs around 35,000 euros per child.
Putting the payback period of the new building at 50 years, this means an additional cost of around 65 euros per month per child. Since the amounts related to the construction and renovation of nurseries cannot be included in the operating costs, the real cost per child is 650-750 euros per month.
To what extent does the parent contribute to covering the costs?
The law sets a maximum limit for parental allowance, which is 20% of the minimum wage in Estonia. This year the minimum wage is 725 euros and from January 1st it will rise to 820 euros. This means that if currently the maximum accommodation fee for a parent is 145 euros per month, next year the maximum accommodation fee will be 164 euros per month. Of course, it should be noted that most municipalities do not ask parents for the maximum price for the place, at least not from their residents.
In most cases, municipal tea plantations are limited to a 10% fee, which until now amounted to 72.50 euros, and from the new year will be 82 euros. Therefore, if you add up all the expenses relating to nursery school, the cost sharing for parents will be around 10 percent. Furthermore, various subsidies have been established in most municipalities, including a discount or even an exemption from the tourist tax for families with many children.
“At the same time, we all know what three meals a day means financially, for which the regulations set very specific requirements.”
Although according to the law the cost of the daily meal must be paid by the parent, many Municipalities have made concessions or do not apply any fee for this meal. At the same time, we all know what three meals a day means financially, for which regulations set very specific requirements.
So, if a parent sometimes asks him what service he receives for the place he pays for his child, the most honest answer would be that he gets nothing in particular.
We also often hear the argument that parents pay income tax to the municipality and therefore must provide the necessary services required. A little calculation will help here. In the third quarter of 2023, the average gross salary in Estonia was 1,812 euros. The municipal budget receives 217 euros from the income tax of one parent with an average salary, the contribution of two parents with an average salary to the municipal budget is therefore 434 euros. In other words, essentially only a little more than half of what is spent on a child in kindergarten. Not even a cent for other vital services the family needs.
Separately it would be worth taking stock of what services and to what extent have been created in nurseries for our children compared to other countries. After visiting childcare institutions in several countries and getting to know their work, I can confirm that in very few countries is the preschool service as luxurious as in Estonia. Compared to many European countries, the maximum rates allowed for our kindergartens are also very affordable.
There are countries where the cost of the place is also calculated per lesson, and parents evaluate very carefully when and for how long to send their child to kindergarten. Fortunately, parents in Estonia do not have to make such calculations.
In addition to this, many services that are mostly natural and self-explanatory in our nurseries, including support for children with special educational needs, are absent elsewhere or are available at a very high additional cost. We should therefore really be content with state and local governments providing us with a multifaceted service of excellent quality in the European sense for essentially symbolic compensation.
A reasonable deductible is essential
The general conception of extortion and theft in our public sector is mostly associated with the image of bureaucratic masses parasitizing state institutions at the expense of taxpayers. There is no doubt that in every field we find excessive bureaucracy and activities of dubious value that should be reduced or even stopped.
Containment of bureaucracy and unreasonable costs must be addressed on a daily basis and not just as an impromptu job every four years. Knowing that public money is not being used responsibly should disturb any taxpayer. This is especially true in a situation where the money collected is no longer sufficient to cover the costs that have increased over time.
It is only now that the Estonian people are starting to vaguely realize that the state is putting its hands in the pockets of all of us to cut the state finances that they have allowed themselves to be dragged along. One way or another, everything will be paid by the taxpayer. In politics it is popular to simply be against spending cuts and tax increases, but no political party has its own personal money with which to increase or at least maintain welfare. There is no wealth that arises somewhere by itself and that politicians can distribute generously.
Daycare centers are really just a vivid example of how we always want more and better, but expect someone else to pay for this service. We continue to long for a more modern and developing learning environment, educational support services, healthy meals and motivating salaries for teachers, but at the same time we openly express our discontent when our copay increases slightly along with the increase in our income and general prices.
Considering the growth of the average salary in recent years, the price of a place in kindergartens has increased remarkably little. I think we should make more do with what we have. Let’s be content with the fact that state and local governments grant us one of the most luxurious nursery services in Europe at a very reasonable price for parents.
My proposal certainly does not increase parents’ participation in the general costs of nursery schools. Considering how much a high-quality preschool service actually costs and how much parents themselves invest, there is no reason to be so dissatisfied.
2023-12-18 12:26:00
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