Funding For ECE Going Backwards, As Budget Cost Adjustment Lags Miles Behind Inflation

The Office of Early Childhood Education is deeply disappointed by the 2025 Budget, with the organisation’s chief advisor Dr Sarah Alexander fearing the lack of investment in the sector is going to lead to even higher fees for parents, lower quality care of children and even more dissatisfaction from those at the coalface.

The 0.5% cost adjustment for early childhood education funding lags far behind the level of inflation New Zealand has seen in the last year (2.5%), meaning funding has essentially been cut.

No money has been allocated to help fix the most pressing problems facing the sector: low wages, high ratios of adults to children and high fees for whānau.

And yet, the Government has set aside a significant $3.856 million in operational funding to establish and pay for a Ministerial Advisory Group to conduct an ECE funding review.

Alexander says this pool of money would be better spent putting together a committee that included experts, parents, and child right advocates, to review the work of past funding reviews and current evidence, with any remaining funds put into the sector directly.

She is also concerned to see $12 million over four years going into the development and piloting of a tool to assess children’s oral language development, and support 525 services to run an oral language programme.

“This is a band-aid on a systematic problem of overcrowding and not ensuring ECE-trained staff are working with children,” Alexander says.

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The one bright spot in the Budget, from the OECE’s perspective was the $4 million over four years going to Te Kōhanga Reo National Trust to help it meet costs of Information and Communication Technology to support improvements to its administration and human resourcing.

Finance Minister Nicola Willis warned in April that the 2025 Budget would be “one of the tightest budgets in a decade”.

In her Budget speech, Willis said the Government had saved $12.8 billion by scrapping all existing pay equity claims, including one for teachers, through a law change.

However, Alexander says this is not the “saving” Willis is making it out to be.

“Because Minister Willis is a mum who’s had children in ECE, and was a supporter of our ECE teacher pay parity petition in December 2019, we hoped that she would sneak in a funding increase to bring pay rates for qualified teachers in ECE centres back on par with teachers in schools.

“But instead, this is a Budget that sadly upholds the status quo – an ever-decreasing quality of ECE.”

The latest OECE confidence survey, which is conducted annually in the last few weeks before the Budget is released, found that the sentiment among those at the coalface was at an all-time low – with 82% of 1000 respondents saying they believed the Government was taking the sector in the wrong direction.

The average rating that respondents gave the Government for its track record on improving quality in ECE was 1.6 out of 5.

Overall, the respondents’ outlook for the future was equally grim. Eighty-three percent said they expected the situation to get worse.

(The full results from the 2025 confidence survey can be viewed here, https://oece.nz/public/evidence/reports/early-childhood-sector-confidence-survey-results-2025/)

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