GOVERNMENT INCREASES EARLY CHILDHOOD FUNDING SUBSIDY BY FIVE PERCENT FROM 1 JULY
EducationThe Government will increase early childhood education subsidies for licensed and chartered services by five percent from 1 July 1997, Associate Education Minister Brian Donnelly and Education Minister Wyatt Creech announced today.
"Early childhood education services will receive an extra $37 million (GST excl.) in direct Government funding over the next three years," the Ministers said.
"This is significantly above the rate of headline inflation (currently 1.8%) and the $10 million promised in the Coalition Agreement."
"The funding increase demonstrates the Government's continued commitment to early childhood education, and reinforces its consistent approach to early childhood education."
The Ministers said that today's announcement gives the lie to claims that the Government is abandoning the early childhood sector.
"This boost in funding will help ensure that children have continued access to early childhood education, as well as making it affordable for their parents."
"Early childhood education services are free to use this extra funding in any way they think will best meet the needs of children."
The Ministers made this announcement before the Budget to honour a commitment made when the Government passed the State Sector Amendment Act in early May.
The five percent increase in funding subsidies is only one part of the Budget package for early childhood education. Further announcements will be made on Budget night.
ENDS
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BACKGROUND ON EARLY CHILDHOOD EDUCATION
What is the Government's role on early childhood education?
The role of the Government in the voluntary early childhood education sector is to regulate, subsidise and monitor the services provided. It also:
provides funding for professional development and support for staff;
provides discretionary grants to help providers set up new centres and to improve the capacity and standards of accommodation in existing centres; and,
contracts the Early Childhood Development Unit to promote early childhood education, support informal parent-operated Play Groups and help developing centres achieve licensing standards.
How does the early childhood education subsidy system work?
The Government pays a subsidy to eligible early childhood services based on the number of children enrolled and the period of time for which they are enrolled.
The funding provided by Government is a subsidy only. Early childhood services can also obtain funds through donations, fees, and from fundraising activities.
A number of factors affect the level of funding subsidy paid for each enrolled child. Different subsidy rates apply for children aged under two years of age, and for children aged over 3 years of age. Early childhood services that meet standards higher than the licensing requirements receive a higher level of subsidy.
Kindergartens receive a separate, higher, level of subsidy than other types of early childhood services, but as they do not enrol children aged under 2 years, they are funded at a single rate.
There are lower and upper limits on the number of hours for which services can receive funding subsidies.
There is also a childcare subsidy available through the Income Support Service to parents on low incomes, whose children attend fee-charging licensed and chartered services.
It is currently expected that for the year ended 30 June 1997, $251.9 million of taxpayer funding will be provided to the sector on bulk subsidy grants alone, compared with $99 million in 1989.
This funding announced today is in addition to any increases early childhood education services will get as a result of growth in roll numbers.
Table 1: Funding rates for different services Pre-1 Jan '97 Current Rate New rates Total % increase
Under 2 years
Standard rate $4.50 $4.61 $4.84 7.6%
Quality rate $5.00 $5.12 $5.38 7.6%
Over 2 years
Standard rate $2.25 $2.31 $2.43 8%
Quality rate $2.50 $2.57 $2.70 8%
Kindergartens $2.90 $3.09 $3.24 11.7%
NB The actual rates payable were rounded to the nearest whole cent, so some of the rates increased by slightly more or less than 5%.
What were the 'Before Five' reforms?
Since 1988, successive Governments have implemented the policy directions of 'Before Five', with the goal of providing quality affordable, self-managing early childhood education that is accessible to all.
The key components of 'Before Five' were:
one set of regulations for all early childhood education centres;
a code of practice for all home-based services;
charters for all funded early childhood education services;
curriculum guidelines for early childhood education services; and
discretionary grants and loans for approved early childhood education services.
How many children use early childhood education services?
A major outcome of 'Before Five' was an increase in the range of early childhood services and the access families had to them.
There has been phenomenal growth in early childhood services in recent years.
There are just under 3,900 licensed and developing early childhood services (up by 1034 from 1990).
The range of services includes playcentres, Pacific Islands early childhood centres, home-based services, kindergartens, playgroups and childcare.
The number of children participating in early childhood education has increased from 118,367 in 1990 to 160,291 in 1996. Since 1990/91, the number of hours the Government subsidises has risen by 60%. Most of this growth has been for children under three years old.
Table 2: Number of children enrolled at 1 july 1996. Type of Service No. of children enrolled Percentage of total
Regular childcare 57,582 36
Kindergartens 46,960 30
Playcentres 17,596 11
Kohanga reo 14,302 8.9
Early Childhood Development Unit funded Playgroups (incl. unlicensed Playcentres) 12,564 7.9
Home-based childcare 6,558 4
ECDU-funded Pacific Island Language Groups 3,736 2.3
Total 159,298 100.0
NB: This table does not include children enrolled in the Correspondence School or in casual childcare.
How does this increase relate to the government's recent move to take kindergartens out of the state sector act?
These two issues are unrelated. The removal of kindergartens from the State Sector Act has no effect on the level of funding they receive. All it did was to remove the Government from the collective contract negotiations between kindergarten teachers and their employers.
What options do kindergartens have to increase their funding?
They have already benefited from a 11.7% increase in their subsidy rates since December 31st 1996. Last year the Government gave kindergartens the option of offering an extra 40 sessions a year (up to 360). Services are only subsidised for the number of sessions they provide. If kindergartens provided an extra 40 sessions, they could increase their subsidy income by an extra 12.5%.