Commission files charges over ECE subsidy misrepresentations

Media Release

Issued 5 July 2016
Release No. 2

Commission files charges over ECE subsidy misrepresentations at Auckland pre-school

The Commerce Commission has filed charges in the Auckland District Court against Kowhai Montessori Pre-School Limited and its former director and manager Rebecca Brindle, following an investigation into allegations they misrepresented to parents the subsidy the pre-school received under the Government’s Early Childhood Education (ECE) scheme.

Kowhai and Brindle each face 14 charges under the Fair Trading Act relating to five invoices and two letters sent to parents between October 2013 and October 2014.

The Commission alleges that in October 2013 Kowhai, which operated in the suburb of Orakei, began misrepresenting the subsidy it received under the Government’s 20 hours free ECE scheme to parents of children aged three to five.

Kowhai advised parents that the ECE subsidy contributed $4.70 toward its set hourly rate of $11.70, with the $7 balance to be met by the parental contribution. This representation was also repeated in a letter sent to parents in May 2014 that advised the hourly rate was increasing to $13.70, making the parental contribution $9 an hour.

The Commission alleges that the actual subsidy Kowhai received from the Ministry of Education at this time was $11.33 per hour under the 20 hours free ECE scheme, and that it also received additional funding under the Plus 10 hours ECE scheme.

In September 2014 Kowhai wrote to parents informing them their contribution would be reduced to $8 an hour in light of extra funding announced in the Budget increasing the ECE subsidy to $5.70 an hour. The Commission alleges that at that time the subsidy received was $11.43 an hour.

Kowhai and Brindle have both entered not guilty pleas and are scheduled to next appear in court on 27 September. Name suppression has not been sought.

Kowhai Montessori Pre-School was sold last year and now operates under a new name under new management.

As this case is before the courts the Commission cannot comment any further.

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