PUTTING 3% GST on childcare will make a bad situation worse for parents who cannot find a free nursery place and who need to pay for care for young children, according to a report published today.

The Corporate Services Scrutiny panel report on GST says the tax will exacerbate the gap between parents who can get one of the limited free places and those who need to pay. It also says that it is unacceptable for the States to levy a tax on nursery places when they do not offer universal free coverage and that Treasury Minister Terry Le Sueur and Education Minister Mike Vibert need to urgently sort matters out before GST begins in April 2008. ‘There will be a cost implication, but this has to be sorted out by the time GST begins,’ said Corporate Services Scrutiny chairman Pat Ryan. ‘I know they have highlighted it, but it has to be dealt with. This could have knock-on effects on economic development, young professionals in the finance industry and all sorts of issues.’