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Budget 2013 - Spending Increases, Cuts, and Implications for the ECE Sector

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The Government has continued its focus on increasing participation in early childhood education among high priority groups in this week's Budget.

Much of the spending in the early childhood education sector over the next four years will be targeted towards increasing participation among Maori and Pacific Island families and in low-income area.

The Government has committed to achieving a participation rate of 98 percent of children starting school having attended some form of early childhood education by 2016 and has allocated a total of $80.5million over four years for costs directly associated with achieving this.  Around $24million of this is to be put toward direct interventions to raise child participation, including action groups and project contracts in targeted areas. A trial of purchase agreements with large ECE providers will see large ECE providers given incentives to raise child numbers at their services in targeted areas. 

Earlier this week Education Minister Ms Parata also confirmed the Government had committed $9.3million to the Targeted Assistance for Participation Fund this year to help children in poorer areas such as South Auckland and Porirua access ECE. However, Labour’s early childhood education spokeswoman Sue Moroney said this was considerably less than the $23million allocated by the same fund in 2011/12.

Just over $41million will be put toward equity funding, aimed at services in low socio-economic areas or services that offer early childhood education in a language or culture other than English.  Providing a funding top-up for these services is Government's way of signalling to ECE providers that they are supported to go into such areas whilst keeping in good with ECE lobbyists representing providers in more affluent areas by keeping the base funding rates the same for all.

ECE services will get a two percent cost adjustment to the non-salary component of ECE funding rates. The increase will be between $0.01 and $0.08 per funded child hour; for a service with 50 children this could work out to be around $3,000 extra a year. Around $38.5million has been earmarked for the two percent cost adjustment.  

An increase in funding rates, while always welcomed within the ECE sector, is unlikely to make a big difference to most ECE services already struggling with increasing wage bills and increasing costs for essentials such as electricity and repairs.

The Budget also revealed a move away from assistance for ECE services to have qualified teachers.  The Provisionally Registered Teacher (PRT) grant has been axed and the ECE Service Teacher Education Grants (ECESTEG) will no longer be offered after the current round. The ECE Network management programme and the Pacific Island and Targeted Early Childhood Education Licensing programme have been cut. The operational funding amount to support playgroups has been reduced.

The savings will be put toward a  'Services Performance Fund' to provide intervention for services deemed by the Ministry of Eduction to need extra help. Ms Parata said the initiative was about ''making sure that everyone who has a role in a child’s education – parents and caregivers, whānau and communities, early childhood services, schools, teachers – are supported in lifting up those who are being left behind, and encouraging those who are doing well to do even better.''

A further $56 million has been set aside for a contingency fund which is likely to be used to cover the increased costs of subsidies such as the 20 hours scheme as participation increases and costs associated with making sure beneficiaries with children aged 3 - 5 years use ECE. 

The TeachNZ scholarship scheme is facing cuts to save around $29million in scholarships and $30million in the voluntary bonding scheme, as a decline in demand for teacher training and fewer qualified teachers finding employment in the education sector is expected to worsen. 


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