Treasury opposes pre-school plan

By STUART DYE

Plans to offer free education to all children aged three and four at community-based centres have no clear educational rationale and don't offer value for money, says the Treasury.

Education Minister Trevor Mallard announced the provision of 20 free hours a week from 2007 as part of the Budget.

But papers released under the Official Information Act reveal the minister snubbed advice from Treasury officials.

"We do not recommend you pursue this option," they said in a report in November last year.

The Treasury said parents, some early childhood centres and low-income and solo-parent families could all suffer because of the new entitlement.

Officials told the minister that children from middle-upper income families would see little benefit from the free hours. They recommended a targeted approach for low-income families and solo parents.

"A universal approach carries high dead-weight costs due to the lack of targeting those groups currently under-participating," said one report.

There would be an incentive for parents to attend community centres for the free entitlement and then shift to private provision for remaining hours, placing pressure on the supply of community-based centres.

Meanwhile, an important pre-requisite for many parents wishing to enter, or stay in, the labour market was that they had access to childcare they felt comfortable with.

If parents were not comfortable with the community-based care available to them and could afford other options they might "revisit their choice to work or the hours they work".

The Treasury also said there was no educational basis for restricting the provision of free hours to community-based centres.

Announcing the free entitlement, Mr Mallard cited international research which showed that early education was vital in improving a child's performance later in life.

Yesterday, the minister said the decision to restrict the offer to community-based centres was purely financial. "It would have doubled or tripled the cost to include private providers," he said.

The policy was not targeted because it would have created a middle-income trap.

"We have to be very careful about penalising middle-income New Zealanders and that's what this would have done," Mr Mallard said.

The Treasury advice was among a huge range of papers from different Government departments, including a "pile of options" from the Ministry of Education.

The Government's aim was to ensure early childhood education was available "as widely as possible and with minimum cost to users".

Bernie Ogilvy, United Future education spokesman, whose research team requested the papers, said his party had always backed free early childhood education.

"But cracks are clearly starting to show in the policy because the private sector has been left considering its options and there is no specific, educational reason why."

Sue Thorne, vice-president of the Early Childhood Council, which represents mainly private providers, said the Treasury papers backed up her arguments.

The council has claimed hundreds of private providers may go out of business because they cannot compete with 20 free hours offered at community-based centres.

Ms Thorne said she believed Mr Mallard had rejected advice from all officials and had lodged the policy at the eleventh hour.

"The ministry is now scratching its head trying to work out how to implement this, which indicates it was not well thought through."

At odds

* The Government says that from 2007 every 3- and 4-year-old will be entitled to 20 hours' free education at community-based centres. It will spend about $483 million introducing the programme.

* The Treasury says only 60 per cent of children would benefit, key target groups would miss out and it would not be cost-effective.