Budget 2018 was filled with promise. There was a lot of rhetoric in the lead up for our sector with the Government saying children matter, the early years matter, and there was a pre-Budget announcement of much needed funds for learning support in early childhood education (ECE), expected to benefit 8,000 more children.
When the allocations for ECE were announced on 17 May we were disappointed for our sector, a sector that has had only a limited funding increase in over a decade. Of course we are grateful for the 1.6% increase in the Universal and 20 Hours subsidies over the next four years, but it just isn't going to stretch far.
The 2018 Budget was the first for the new Labour-led coalition Government, and promised much following an election campaign that saw a number of baubles and promises made. The reality check statement, and one we agree with, was the observation from Education Minister, Chris Hipkins, that we should not expect ten years of cuts to be fixed overnight. It will take time. We understood.
But the Budget Day announcements ended up featuring the same tactics employed by the previous government over the last ten years, and that was disappointing.
For ECE, I am confident that the Government will continue to talk about the sizeable investment they have made in early learning - $590.2 million. Not to be sneezed at. The problem is that 82% of that investment, or $483.1 million in operating funding, is spent solely on increased demand or more children attending ECE. As more children enrol in childcare, as is encouraged by government policy, the government of course has to pay more. It's a demand-driven service. So, most of this extra increase really just covers the fact more children are now attending ECE and services have been covering that increase in demand for some-time.
ECE centres are to also receive $104.8 million increase in the Universal and 20 Hours subsidies in the next four years, or a 1.6% increase. It's paid at a set per-child rate. And that per-child rate has in-fact suffered cut-after-cut by stealth over the last decade, mostly invisible to parents. It's not kept pace at all with inflation or increased operating costs, let alone kept pace with the needs of the ECE curriculum, new legislative demands, and other regulatory frameworks governing ECE.
After losing an estimated $103,000 per year in government subsidy funding, the average childcare centre will from January 2019, get an extra $12,000 under the Budget increases. Looking at this figure more closely, based on 50 children and 50 weeks per year Ministry of Education subsidy (including 2 weeks of stat holidays not funded), we have calculated the actual per-child increase will be about $4.86 per child per week. It looks something like this when it is broken down: additional $12,155 divided by an average of 50 children, equals $243.10 per 50 weeks (including 2 weeks stats not funded), or an increase of $4.86 per child per week.
That still leaves centres with less subsidy funding per child than they were receiving a decade ago in 2008. And let's face it - the cost of living in New Zealand has not exactly gone down in ten years has it! To put it into another context, the additional subsidy funding announced in the Budget is the equivalent of a quarter of the annual pay for one ECE-qualified teacher. The per-child rate makes a difference for quality childcare and education centres to operate viably.
The government will talk about the significant investment they have made in ECE, and the fact this is the first investment in a decade, because (after all) that's one of their key priorities this Budget. While we are grateful for more, and long over-due investment in ECE, the Budget allocations are a drop of what is needed to make up for the cuts and underfunding of the last decade, during which time government policy encouraged more children into ECE and demanded quality. The Budget allocations fail to match the rhetoric of the importance of education and, in particular, the buy in that investment in early learning can make all the difference long term to children and society. Many pieces of international research have pointed to the fact that investing dollars in the early years, and particularly in ECE, pays back a lot more to society later on.
This was a conservative Budget. Some of our centres are upset. It will takes years to repair the underfunding of ECE. Meantime, the government wants quality and highly-regulated ECE services, run by professional and well-paid qualified teachers, and for every child to attend, with low fees and no barriers. That is not a free service. And, nor is that a profit-making model for the sector. Parents and government need to understand that.
This is not sour grapes about an underwhelming Budget. ECE has undergone significant changes in the last 15-years to meet the changing needs of families, the community, economic needs for working families, and government expectations for education and care - and it will be years before government funding can make up for a decade of lost time.
Meantime, the ECE sector will carry on caring for and educating our youngest citizens, because they know it matters and they care. They care not just for the children, but for whole families and the wider community too.
The ECC will be active participants in the education reforms, which is another avenue for change especially around the unevenly applied regulations across ECE.
The challenge for New Zealand and the questions we need to ask:
Peter Reynolds
Chief Executive Officer, Early Childhood Council
