22 Sep 2010

Concern over early childhood subsidy change

8:33 pm on 22 September 2010

Early childhood education leaders say an unexpected change in government funding is likely to result in fee rises.

The Government previously passed on pay rises won by kindergarten teachers by increasing the rate of subsidy it pays.

It is called a 'flow-on effect', which recognises that any pay rises in kindergartens are likely to push up pay rates in other sectors.

The last kindergarten pay rise was in 2008. But the Government is not passing on the impact of that settlement to other providers.

The cut was noted in this year's Budget as a reprioritisation of funding, but there was no explanation of what it involved

Radio New Zealand's education correspondent says the change will save the Government about $20 million per year and accompanies other reductions announced in the Budget.

Early childhood leaders are surprised by the change, saying it will make it hard to maintain pay parity between different types of early childhood service.

They are unhappy they learned of the change from Radio New Zealand - not the Government.

Other reductions

The Budget included reductions in the two top subsidy rates for centres where most or all teachers are qualified.

Together with the cut to the kindergarten flow-on, that will save more than $100 million per year.

However, overall funding for the sector is increasing - mostly because more children are expected to enrol in early childhood education and because of a 2% increase in funding rates.