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Budget will cost average early childhood centres $15,000

Budget 2015 will cost average early childhood centres $15,000 a year and increase parent fees

Budget 2015 will cost the average early childhood centre about $15,000 in lost revenue every year, and means thousands of parents will be paying more for early childhood education, says New Zealand’s largest representative body of licensed early childhood centres.

Early Childhood Council CEO Peter Reynolds said the Budget had delivered yet another in a long line of per-child funding cuts, and would put some centres and families ‘under terrible pressure’.

Based on a Labour Cost Index of 1.9%, an average centre of 50 children (with 20 under two and 30 over two) would lose $15,000 a year as a result of Budget 2015, Mr Reynolds said.

With no increase in the basic universal subsidy and no increase in funding for 20 Hours, the real (after-inflation) rate of government payment for early childhood centres had fallen, as it had fallen every year since Budget 2010.

It was clear, said Mr Reynolds, that the National-led Government had a long-term strategy to reduce the portion of early childhood education fees paid by the State, and increase the portion paid by parents ‘one little bit at a time’.

Even before Budget 2015 many centres had, since Budget 2010, lost between $60,000 and $80,000 of revenue a year, he said. And centres were now facing their annual choice between increasing fees for parents and lowering quality.

Many had, since 2010, already replaced qualified staff with the unqualified. Most had slashed professional development for teachers. Some had cut teacher-child ratios. Many had cut non-essential services.

And it was likely most would adapt to the latest government cut by increasing parent fees.

But those centres in lower-middle income areas (areas with families on low incomes, but not low enough to benefit from the increase in the targeted childcare subsidy), where parents could not afford fee rises, would be forced to cut their services yet again.

The impact on stand-alone centres would be particularly tough, because they lacked the economies of scale of larger groups, Mr Reynolds said.


‘It is sadly clear that the Government has let down early childhood education in this Budget, and those centres already under financial pressure will soon feel the pressure even more keenly,’ he said.

The Early Childhood Council has a membership of more than 1000 centres. About 30% are community-owned and 70% commercially owned. These centres care for tens of thousands of children from one end of New Zealand to the other.

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