There was little to cheer the early childhood sector in this year’s Budget with the increase in funding announced unlikely to make much difference to most services.

Finance Minister Bill English announced an increase of $155.7million for early childhood education funding in his Budget speech, designed to cover the cost of increased participation and adjusting subsidy rates.

Nearly $54million will be allocated to increasing subsidy rates, which Education Minister Hekia Parata said would help keep fees affordable for parents. 

The rest of the money will be allocated over the next four years to help meet the extra demand forecast to be created by increased participation as the Government works towards its goal of having 98% of children enrolled in early childhood education by 2016.

Despite the increase, subsidy rates will still not reach the levels they were at before the National Government began funding cuts in 2011.

Prior to those cuts, the top subsidy rate was $12.73 per child per hour for kindergartens and childcare centres in the 100% funding band for 20 Hours ECE and $11.78 for those in the 80-99% funding band.

From July 2014, after the increase announced in the Budget, the top rate will be just $11.43 for childcare centres and $11.72 for kindergartens. For under-2s, the top rate will be $12.12 per child per hour in childcare, compared to $13.35 in 2010.

Rates for sessional services will continue to be significantly lower than those for all-day services.

In his speech, Mr English said the remaining money would “help early childhood centres remain accessible and affordable, meet demand pressures and increase participation towards the 98 per cent target.”

However, as previously reported by ChildForum there are sector concerns about the concept of a demand driven market, with already too much competition within the sector and no limit on the amount of services that can open in any one area, along with increasing licence sizes (the limit was 50 children per centre licence and government changed this to 150 children).

There will also be concern that none of the funding appears to be allocated to increasing standards in ECE, concentrating instead on increasing numbers of children participating and the number of hours for which they attend an ECE service.

More encouraging for families was the announcement of an extension to paid parental leave.

Mr English announced that paid parental leave will be extended by two weeks to 16 weeks from 2015 and another two weeks from 2016. The scheme will also be widened to include more people, including guardians and those who are in casual work or have recently changed jobs.

This will allow more parents to stay at home for just a little longer with their babies in the vital early stages of a child’s life.

Next week ChildForum will release the results of its most recent survey of the early childhood education sector, revealing what the sector feels is important and what it would like the Government to concentrate on.

The New Funding Rates