18 May 2023

Budget 2023: Funds for tertiary and schools, early childhood a big winner

3:21 pm on 18 May 2023

Early childhood had the biggest boosts in the education section of today's Budget.

It used the spending to ease cost-of-living pressures on families with young children and address complaints from early learning centres about the affordability of pay parity for their teachers.

The single most-expensive new initiative extended eligibility for 20-hours of free early education to two-year-olds from 2024 at a cost of about $370 million per year.

The scheme provides extra funding to centres that do not charge fees for the first 20 hours of attendance and had been restricted to children aged three and over.

Education Minister Jan Tinetti said extending the subsidy to two-year-olds would save some families $133 a week.

She said about 66 percent of two-year-olds were enrolled in early education and the change could increase enrolments by 7 percent.

The Budget also provided $93m per year to help early learning services pay their teachers the same rates as school and kindergarten teachers.

Though more than half of early learning centres have agreed to pay parity for their junior teachers, only a third have agreed to it for their senior teachers.

Wellbeing Budget 2023.

The single most-expensive new initiative extended eligibility for 20-hours of free early education to two-year-olds from 2024 at a cost of about $370 million per year. Photo: RNZ // Angus Dreaver

Tinetti said differences in pay between similar roles was contributing to teacher shortages and staff retention.

Early learning subsidies were increased 5.3 percent, tertiary subsidies were to go up by 5 percent, but schools' operations grants were increased 3.5 percent.

Total spending on schools and early education would increase by about $690m to $17.4 billion next year while tertiary education spending would increase $120m to just over $4b next year.

However, funding for schools and early learning would drop in 2025 and beyond because some Budget items were funded only until the end of 2024.

There was also a range of savings and cuts in education.

Lower-than-expected school and early childhood enrolments would save $106m a year for four years and lower uptake of the first-year fees free scheme was saving $70m a year for four years.

The Budget cut $10m in annual funding for universities' centres of Asia Pacific excellence, and $4.3m a year from the entrepreneurial universities fund.

The Budget for tertiary education

The Budget included a $220m loan to Te Pūkenga for transformation of IT systems across its various campuses. RNZ previously reported that the institute had requested about $300m.

It also extended the Apprenticeship Boost scheme to the end of 2024 at a cost of $77m.

Tinetti said the scheme paid subsidies to employers of first- and second-year apprentices and its extension would support about 30,000 trainees.

She said the 5.3 percent subsidy increase to tertiary subsidies was the largest in 20 years.

Conference and Presentation. Audience at the conference hall. Business and Entrepreneurship. Faculty lecture and workshop. Audience in the lecture hall. Academic education.

Photo: 123 RF

In addition, subsidies for courses in mātauranga and te reo Māori at level 3 and above would be progressively increased by 15 percent over four years.

Though fewer-than-budgeted students had been taking up the first-year fees-free scheme, the government expected tertiary enrolments would increase next year.

Tinetti said the Budget provided $180m to cover 16,000 more full-time equivalent students in 2024 and 13,000 more in 2025 than previous funding levels would have allowed.

The budget for schools

The Budget increased funding for alternative education by $11m a year to provide a 30 percent increase to per-student rates and more support for primary and intermediate-aged children.

It provided $40m over four years to coordinate learning support for children in kaupapa Māori and Māori-medium schooling.

Exam with uniform school student doing educational test with stress in classroom.16:9 style

Photo: 123RF

A further $39m over four years went to Māori education organisations that provided programmes aimed at improving attendance and nurturing culture and language.

There was also $147m over two years to install modifications such as automatic doors, lifts, fencing, hoists and bathroom modifications over a period of two years.

The government said the funding followed a near tripling in demand for such modifications since 2016.

The Budget included the previously-announced $1.2b over five years to pay for more school classrooms and up to four new schools.

The Budget only partially addressed a $12m funding cliff related to the Kahui Ako or Communities of Learning Scheme.

It provided $6.8m, enough to fully-fund the cost of the scheme only until the end of the year. That means question marks remain over the future of the scheme beyond the end of the year.

RNZ previously reported that the Ministry of Education was considering making up the funding gap by ending extra pay of $8000-a-year for more than 3000 teachers who lead work within schools.

The roles are part of teachers' collective agreements and removing them has been suggested in negotiations.

Get the RNZ app

for ad-free news and current affairs