Families At Risk Of Losing Out While Government Sits On Critical Funding

While Early Childhood Education (ECE) centres are being pushed to the brink of closure, the Government is sitting on $162 million in unspent Family Boost funding, that could be allocated to ensuring the future of this critical service for tamariki and families.

It’s hard to overstate the scale of the significant issues facing the ECE sector and the far-reaching impacts it will have on every New Zealander, regardless of whether they have young children.

After months of scraping by, the struggle to keep the lights on has shifted to an outright impossibility for some kindergartens and centres across the country, leaving no choice but to close their doors on families desperate for quality early learning education and care.

ECE in Aotearoa has always been a partnership between Government and families. The sector was set up this way to ensure every child has access to crucial foundational education. When the Government doesn’t provide appropriate funding to fulfil its commitment to this partnership, there is no room to move.

For many ECEs, especially those serving low-income and rural communities, government subsidies make up as much as 90% of their income. When the funding dries up, so does access for thousands of children and families.

In the first year, $104m earmarked for Family Boost has been left untouched. Despite the change in thresholds, October saw 55,000 claims against IRD’s expectation of 92,000.

The lack of take-up means a further predicted underspend of $14m per year, leaving a total of $162m of Family Boost which is not going back into the pockets of families.

That’s triple the amount ECE services received with just a 0.5% increase in Budget 2025. Meanwhile, community and not-for-profit centres, as well as locally-owned ECE centres, are facing average annual shortfalls of $41,000, with some staring down deficits four times that size.

The Government's Family Boost scheme was supposed to help families. But most simply can’t afford to pay upfront and claim a rebate later. Its significant underspend signals a system that isn’t working — at a time when ECE services and tamariki urgently need support.

Family Boost was presented as the solution to unaffordable ECE, but in reality, the most effective way to keep fees down and ensure the doors stay open is to adequately fund services directly, not rely on a scheme that has barriers to entry that many families are missing out.

While some may argue that every sector in Aotearoa needs more support right now, allowing ECE to fail would force parents out of work due to a lack of early learning options, undermine business productivity through staff losses, impact local economies and communities, and leave more tamariki starting school without the foundational skills they need to succeed, with a potential life-long impact on their future.

For a Government focused on jump-starting an economic turnaround, allowing ECE to falter - a key sector that boosts workforce participation and lifelong educational outcomes - will ultimately cost far more than any short-term savings.

We have given ministers an interim solution and urge them to act before it’s too late – redirect the Family Boost underspend as a one-off cost adjustment to ECE now, tagged to the 20 hours ECE scheme, which has fee controls.

The sector is in crisis now and cannot wait for the Ministerial Advisory Group to find an alternative funding model.

Redirecting the Family Boost underspend is the most efficient, short-term and cost-effective way to keep ECE services open and fees down, so 190,000 children across Aotearoa can access early learning education. We welcome the opportunity to work with the Government to make this happen.

Ultimately, this comes down to our tamariki. The first 2,000 days matter more than any policy cycle — they shape the rest of a child’s life.

Strengthening early learning now is one of the most powerful investments Aotearoa can make in its future. The rich tapestry of the ECE sector provides a variety of choices to meet the needs of our diverse whānau.

Signed by:
Jill Bond, NZ Kindergartens
Kathy Wolfe, Te Rito Maioha
Heather Taylor, Barnardos
Cathy Wilson, Montessori

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