"This funding gives the Education Council a specific timeframe to establish the full cost of delivering all its functions as a professional body for teachers and to work out how it will become financially independent from the Government."
The Education Council, formerly known as the New Zealand Teachers Council, was established last year and has a wider remit than its predecessor.
The one-off transitional funding will be paid to the Education Council over 2.5 years to support it as it becomes self-sufficient.
It will be contingent on meeting five key performance measures.
One of the expectations will be that the council consults with teachers on registration fees - which have not been increased since 2010.
Currently it costs teachers $220 for a three year practising certificate, the equivalent to $73 per year.
"Fees haven't increased in seven years, yet we have doubled the range of functions of our predecessor, the Teachers Council," Education Council chairwoman Barbara Ala'alatoa said.
This had left the council in an untenable situation, she said.
"The Education Council identified that the Teachers Council was facing an $8.5 million shortfall each year to deliver not just the functions legally required, but those teachers have asked for.
"We will explore a number of scenarios for introducing new fees following the expiry of collective contracts. We will consult with all teachers on how we might increase services fees by mid-2018, and certification and registration fees by mid-2019."
The council estimates the fee could increase to around $470, or the equivalent of $155 per year.
The council must have its business plan in place by June next year, showing the Ministry how it plans to increase revenue and become financially self-sufficient by July 2019.
It will be required to provide quarterly updates to the Minister on its financial position and progress, while the Ministry of Education will commission an independent review of the council's financial progress in a year's time.
The Minister will appoint a person with corporate finance expertise to the Education Council to help support its pathway to financial sustainability.
"This is a significant investment by taxpayers which is in addition to the $3.43 million already invested to help the council establish its new functions and role," Parata said.
"The Education Council is very mindful of the need to demonstrate value to the New Zealand teaching profession and I am confident that it will honour the obligations that this investment incurs."
Five Measures the Education Council must meet:
• Appoint a chief financial officer by November 2016
• Develop an interim business plan by January 2017
• Develop a high quality, detailed business plan by July 2017
• Confirmation of a sustainable long-term plan by October 2017
• Finalise revenue proposals in time to establish the necessary fees by the expiry of collective contracts.
