Learning Support Funding Welcomed But Something’s Got To Give For ECE

There was no meaningful financial relief announced for ECE providers in Budget 25 – but the government’s commitment to a funding review, buried in the detail, may offer some light at the end of the tunnel.

“If you’re an ECE provider struggling to stay viable, you’re asking ‘what will help me keep the doors open? The lack of investment today confirms providers' worst fears - that the Government does not have confidence to invest in ECE because of the broken funding system,” said Simon Laube, Early Childhood Council CEO.

ECC, who’ve campaigned for a comprehensive funding review over many years, takes the funding allocated to an ECE funding review in Budget 2025 as a big win for the entire sector, but says an announcement with the details can’t come soon enough.

“After Budget 2024 we were told there would be real cost relief through the ECE Regulatory Review, but any changes are still unclear and 14-18 months away,” said Early Childhood Council CEO Simon Laube.

Further evidence of the broken funding system was revealed today, with the government having to find $334.5 million to fund higher than expected early childhood payments to providers this year, likely caused by the costly Pay Parity policies combined with questionable population projections. One ECC member alone had a $60,000 shortfall this year due to Pay Parity’s teacher salary progression requirements, which give all teachers 4% salary increments, unfunded by government - shortfalls of that size are enough to sink a vulnerable business or community group.

This year’s ECE cost adjustment of 0.5% is a record low. Over the last six years, successive government’s lowballing adds up to a massive 12.7% shortfall against inflation over the period.

“The Government is allowing these cost pressures to mount up - ECE funding in 2026 will be 12.7% less valuable than it was to providers in 2020, that’s the equivalent of a massive funding cut in today’s dollars,” said Simon Laube.

ECC celebrates the Learning Support investment in the Budget, as it has the potential to make a massive difference for learners who need additional support. Supporting these learners shows that New Zealanders truly care for all children, and it’s about time. In ECE, additional funds for the Early Intervention Service and an expansion of that service into Year 1 of school will massively help address the well-known problems with children's transition out of ECE into school, when the Early Intervention Service used to get cut off. Now it won't get cut off and children who need additional support can experience a more seamless education.

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