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Budget 2017 cuts funding for children in ECE

25 May, 2017

Budget 2017 cuts funding for children in early childhood education

Budget 2017 has stripped funding from children in early childhood education for the seventh year in a row, says New Zealand’s largest representative body of licensed early childhood centres.

Early Childhood Council CEO Mr Reynolds said the funding this year had been taken by making no inflation adjustment to key subsidies.

The result was a loss of $15,000 a year from the average early childhood education centre, making a total loss of $105,000 a year since the Government began its funding cuts in Budget 2010.

The new cuts would mean higher charges for families, some of which would struggle to pay; enhanced risk qualified teachers would be replaced with the unqualified; the further loss of professional development essential for keeping teachers up to date; and the loss of financial surpluses necessary to maintain buildings and play equipment.

Larger groupings of centres might cope better with the cuts than the small because they enjoyed economies of scale, but smaller groupings, stand-alone centres and the children they served were going to suffer, Mr Reynolds said.

‘Hindsight makes it clear this government is committed to a cynical strategy of cutting funding for our youngest of children one little bit at a time so as to avoid the public attention that would arise were they to state their real goals, and implement their policy in one big hit,’ he said.



Mr Reynolds described the approach as ‘potentially very damaging’.

‘At the same time as more families are committing their children to early childhood education earlier and for longer periods of time, the government is implementing a cynical policy of funding cuts by stealth that is eating away at family incomes and putting service quality at risk.

‘This could be very damaging because the most important cognitive development occurs before school. And if we get this wrong, it is extremely difficult and expensive to fix during the school years. If it can be fixed at all.’

Mr Reynolds said Budget news was ‘not all bad’. The Government deserved praise for the ‘$35 million over four years’ it was making available to childcare services with children from benefit-dependent households, the extra funding to cover additional child enrolments, and ‘some modest increases in funding for children with special learning needs’.

‘But for the majority of children in early childhood education the result of this year’s Budget will be more unqualified teachers and higher charges for their parents.’

The Early Childhood Council has a membership of more than 1100 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.

Note: The ‘average centre’ is based on the following assumptions: 50 children, 20 of whom are under two; a total staff of 15 (12 qualified teachers, and three support staff); and no increase in parent fees. Assumptions also include 1.6% increase in wages as per the Labour Cost Index. Full details re the calculations are available upon request.


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