Finance Minister Grant Robertson will need to be on top of his game to land one of the most difficult Budget balancing acts New Zealand has seen for years. Join us live from 2pm for the delivery of Budget 2023 with expert analysis and commentary. Video / NZ Herald
New conditions around the 20 hours free early childhood education and the extension of it to 2-year-olds mean parents will pay less for childcare.
The Budget announcement today included an extension of the 20 hours free scheme to include 2-year-olds which the Government estimates will save families about $133 a week, or almost $7000 a year, from March next year.
New conditions around the scheme will mean centres have to allow parents to enrol their children for only the free 20 hours instead of enrolling them in blocks which force families to pay for hours above the free ones, Education Minister Jan Tinetti said this afternoon.
Centres would be required to charge by the hour and make clear their hourly charges so parents understand what they are paying for.
Christchurch dad Anthony McDonald welcomed the news saying getting the funding from two would make “all the difference”.
He and his wife Vanessa both had to work full time to cover the bills but could not afford to have their 18-month-old daughter in daycare full-time.
Instead, Vanessa juggled working from home with looking after Chloe two days a week and had her in daycare for the other three.
Anthony, an inventory and logistics co-ordinator, said after paying all the bills they had about $250 left a fortnight between the two of them - assuming there were no unexpected expenses.
He said the savings from the earlier funding would give the family options and make life “that much easier”.
It would mean they could choose to send her four or five days so Vanessa could be in the office more or they could use the savings to help pay for unexpected expenses.
“It’ll help ease the burden when it comes into effect - not just for us but for others in a similar situation,” he said.
Today’s Budget also provides a hand for growing families with the Government committing to pay a Kiwisaver “employer” contribution to paid parental leave recipients.
Tinetti said childcare was one of the biggest costs for families and the changes were a win-win for families with young children.
“It will reduce costs, remove barriers to early learning and allow parents to return to work or take on more hours if they can. It also recognises the fact that children who are involved in quality early learning benefit in many ways, including later in life.”
Pay parity for teachers was not just about fairness but about attracting people to the profession and retaining teachers, she said.
Office of Early Childhood Education chief adviser Dr Sarah Alexander said the extension of the 20 hours free subsidy was welcome and said it was “brilliant” that all parents now had the choice to enrol their child for 20 hours or less.
She was, however, disappointed there was no change to child-teacher ratios or incentive to improve the proportion of staff with early childhood qualifications.
Early Childhood New Zealand chief executive Kathy Wolfe the extension of the 20 hours-free ECE scheme should make a meaningful difference to parents.
Early Childhood New Zealand chief executive Kathy Wolfe was also pleased with the Budget announcement.
“We’re extremely hopeful that this additional funding boost and extending free ECE to 2-year-olds will make a meaningful difference for the thousands of parents that want to ensure their tamariki are being cared for and educated, in an early childhood centre,” she said. “This may help parents and caregivers to return to the workforce.”
She said the additional funding was a step towards helping the sector back to its feet but doubted the additional $322 million for pay parity was realistic.
Early Childhood Council chief executive Simon Laube said today’s announcement greatly exceeded expectations.
“This is really helping parents, This is reducing the amount that they have to pay in childcare. It means they could get a child into ECE now at age 2 when maybe before they would have had to wait until they were 3. And when you do get them in you get 20 hours free - really free. This is a really cunning way of doing something that helps parents, helps get people back to work but doesn’t really inflate or cook the economy in a bad way.”
While it was great for parents, it was a lifeline for many centres, he said.
“The 20 hours increase will make a lot of centres that were possibly going to close have hope that they will actually be able to survive,” he said.
The announcement was also great for teachers who would be paid the same as kindergarten teachers if their centres opted-in to the full pay parity scheme, he said, but the extra funding would not be enough to cover the increased cost to centres.
Laube said it was also positive that the scheme to help pay relocation costs for teachers from overseas had been extended because there were not enough teachers being trained locally to fill demand.
There would also be an extension of early learning subsidies to all providers with an increase of 5.3 per cent for playcentre, kōhanga reo and home-based services.
For other parts of the education sector, the Budget included:
- $41m over five years for alternative education to support students at risk of disengagement.
- $225m directly into Māori education for building and learning support co-ordination for kaupapa Māori and Māori medium education.
