Government funding of ECE pre-budget and implementation of budget cuts.

Click this picture to see the cut

National’s 2010 budget, aimed at bringing ECE spending under control has now been implemented as of February 2011.

The last decade has witnessed an unprecedented increase in Government expenditure on ECE in New Zealand. Government Statistics reveal the total cost rising from $413 million in 2002, to *$1.354 billion per annum (year ended June 2010).

Two of the most significant expenses included in the total* year ended June 2010 were:

·       Children’s ECE participation at $1.148 billion. (Cost of 20 hours funding to ECE providers, equity funding,  correspondence school and payments to license exempt services).

·       $150.2 million for childcare subsidy from Social Development.

According to NZEI the government will be cutting over $400 million from ECE services during the next few years. Most of the savings (approximately $295 million) will be made by cutting back the two highest funding rates for ECE centres that employ between 80-100% qualified teachers. This will affect approximately 2000 ECE services which cater for 93,000 children.

Prior to February 2011, ECE providers received government funding for employment of staff at differing rates, depending on their proportion of qualified teachers. Those employing between 80 - 100% qualified and registered teachers such as kindergartens, received the highest rates. This rate recognised the costs of employing 100% qualified teachers and provided an incentive for others to reach Labour’s strategic plan target of 100% qualified teachers by 2012. As a result of the 2010 budget the two highest rates have now been removed altogether and funding will only be paid for up to 80% of qualified staff.

Others cuts include scrapping the annual $4,300 PRT grant paid to centres who have more than 80% fully qualified teachers. This grant was used by centres to support provisionally registered teachers during their two years induction programme to become registered. According to New Zealand Kindergarten’s [NZK] chief executive Claire Wells there are at present 250 provisionally registered teachers in Kindergartens throughout New Zealand, which will equate to a further loss to Kindergartens of just over 1 million in funding. She argues that cutting back on spending due to the shortfall, could jeopardise the quality of their service, or if costs are passed on to parents, either way it could mean that children miss out. General Manager Bronwen Bertram said Heretaunga Kindergarten Association would lose $500,000 as a result of the budget cuts, but remain committed to retaining all qualified staff. She said lost revenue would be made up by cutting operational costs such as maintenance, professional development and resources (Personal communication, March 2011).

Government’s funding of ECE has become a complicated process as it endeavours to provide for the wide diversity of ECE services including education and care centres, home-based services, kindergartens, kōhanga reo, playgroups, and playcentres. The ECE funding rates for licensed services are subsidies that reflect teaching salary costs and four components of operating costs (operating, capital, property operating and non-teaching staff costs).

For many centres, particularly kindergartens that have traditionally always employed fully qualified teachers, the cuts will mean huge reductions to their funding. NZK chief executive Clare Wells estimates a $12 Million reduction to the annual NZ kindergarten budget. She points out that Kindergarten is a community based non-profit organisation which relies on government to meet most of their operational costs to support a high quality education. She believes the government is effectively saying 80% qualified teachers is sufficient to provide quality and yet research points to teacher qualifications as an important factor in providing quality ECE (Carr & Mitchell, n.d.).  This appears to be contradictory to the findings of the Minister of Education’s advisory group (2010, p. 9). This group was set up to consider future policy settings around the teaching workforce and stated in its report last year that "effective teaching is recognised as the most important lever for improving educational outcomes for students."

In a press release dated 31st January 2011, Minister of Education Anne Tolley announced that the National Government will invest the highest amount any government has ever spent on ECE. She reiterates National’s commitment to high quality ECE and greater participation for all children while also highlighting the need to bring spending under control due to escalating costs which has seen ECE funding treble over the last five years. In justifying the need to cut funding, Anne Tolley also mentions disproportionate government spending between the average taxpayer subsidised payment per ECE child of $7600, compared with the cost per primary school pupil at $5,528 and high school at $6733. (This comparison is rather misleading as the main difference is the cost of salaries for the higher adult to child ratios necessary in early childhood care and education; for children under 2 ½ years 1:4 and over 2 ½ at 1:10 for full day, or 1:14 for sessional) as recommended by the Ministry of Education.  

The ECE funding cuts may severely affect non-profit services which have for over a century provided for the 1939 Labour Government’s objective penned by Director of Education C. E Beeby, “that every child, whatever his level of ability, whether he be rich or poor, whether he live in town or country, has a right as a citizen to a free education of the kind for which he is best fitted and to the fullest extent of his powers (May & Mitchel, 2009). Will Government continue to deliver a free quality early childhood education for children in New Zealand?  How will this compare  with early childhood services in business for profit?

Carr, M., & Mitchell, L. (n.d). Ocassional paper: Qualified teachers in early childhood centres: Do we need them? Retrieved April, 2011, from http://www.nzkindergarten.org.nz/announcementretrieve.aspx?id=33643

May, H., & Mitchell, L. (2009). Strengthening community-based early childhood education in Aotearoa New Zealand: Report of the quality public early childhood education project. Retrieved from http://www.nzei.org.nz/site/nzeite/files/ECE/Report_QPECE_project_web_2+JD.pdf

Reference for web links:

Early Childhood Education funding at record $1.4 billion, (2011). Retrieved April, 2011, from http://www.scoop.co.nz/stories/PA1101/S00168/early-childhood-education-funding-at-record-14-billion.htm

Early childhood education statistics, (n.d.). Retrieved April, 2011, from http://www.educationcounts.govt.nz/statistics/ece

Key messages and facts, (n.d.). Retrieved April, 2011, from http://www.nzei.org.nz/site/nzeite/files/ECE/Key%20Message%20and%20Facts.pdf

Ministry of Education, (n.d.). Retrieved April, 2011, from http://www.minedu.govt.nz/theMinistry/Budget/Budget2010/Factsheets/ECEFundingChanges.aspx#jump1

Ministry of Education, (n.d.). retrieved April, 2011, from http://www.lead.ece.govt.nz/ManagementInformation/RegulatoryFrameworkForECEServices/RegulatoryReview20042008/AdultChildRatios/AdultChildRatiosSummaryOf2005Feedback.aspx

Ministry of Education, (2010). A vision for the teaching profession. Rertieved April, 2011, from http://www.minedu.govt.nz/~/media/MinEdu/Files/TheMinistry/Consultation/WorkforceAdvisoryGroup/WorkforceAdvisoryGroupFinalReportPDF.pdf

Wells, C. (2009). More funding cuts to kindergartens. Retrieved April, 2011, http://www.nzkindergarten.org.nz/AnnouncementRetrieve.aspx?ID=42408

Wells, C. (2009). Children lose out in budget cutbacks. Retrieved April, 2011, from http://www.nzkindergarten.org.nz/AnnouncementRetrieve.aspx?ID=32702