Budget 2026: Still Not Delivering for Children in ECE
PRESS RELEASE – 28 May 2026
Budget 2026 raises subsidies, not standards, in early childhood education.
Budget 2026 provides:
- $164.8 million for a 1.5% cost adjustment to ECE sector subsidy rates for most ECE services from 1 July 2026 while Free Kindergartens receive a lower cost adjustment (0.48%) to reflect the higher funding they receive under the KTCA.
- $2.9 million in additional operational funding for the Te Kōhanga Reo Trust.
- $4.8 million to extend the Food in ECE programme for one more year, providing cooked lunches to up to 10,000 children. (See the Budget 2024 summary below for concerns about the programme’s efficacy and how it was introduced.)
Budget 2026 continues the Government’s pattern of minimal investment in ECE under Associate Education Minister David Seymour and Minister Erica Stanford, with no real focus on improving quality for children.
Dr Sarah Alexander, Chief Advisor at the Office of Early Childhood Education (OECE), said the Budget “papers over problems” rather than fixing them.
She said it was disappointing that the Government has chosen to retain the $4.1 million allocated in last year’s Budget for its Ministerial Advisory Group reviewing ECE funding. “This review could be done faster, better, and at a fraction of the cost. That money should be going to children, not into the advisory group and bureaucracy.”
She also highlighted the Government’s failure to place stronger conditions on funding to ensure subsidy increases directly translate into lower fees for parents, better wages and conditions for teaching staff, and improved quality for children. “Without conditions, funding increases can be used in ways never intended or disappear into profit, instead of improving early childhood education and care.”
Dr Alexander noted that the Government has still not signalled plans to require full financial transparency from private operators, including commercial data such as cost structures and pricing.
She said the Government could have shown real commitment to children by reversing decisions made since taking office.
“The Government’s ECE Reform programme has been about cutting ‘red tape’ and lowering costs for service providers,” Dr Alexander said. “That has meant removing or lowering standards, weakening enforcement of compliance, and reducing protections for children.”
She said meaningful improvement requires investment in the fundamentals.
“If we want better outcomes, we need skilled and qualified ECE teachers, full pay parity with school teachers, small group or class sizes, and strong regulations with regular spot checks and effective enforcement.”
The consequences of poor‑quality care and education are well documented and include more challenging behaviour, learning difficulties, serious incidents, higher rates of illness, and increased pressure on the workforce.
“These problems do not stop at the ECE gate. They flow into schools, into the health system, and into wider social and educational disadvantage. Children pay the costs, and taxpayers further down the system.
“It is more effective to spend now in ways that make a difference, rather than pay later,” Dr Alexander said.
Summary of ECE Initiatives in the Previous Two Budgets
Budget 2025
- $51.1 million Sector Subsidies – a cost adjustment of 0.5% to sector subsidies for 30 Hours (under and over 2 yr-olds), 20-Hours ECE, and Equity funding.
This was below inflation. Sector lobbyists warned that such a tiny increase in funding would cause more services to fold due to financial pressure. However, this did not occur. Services are very good at adjusting. They close for a range of reasons, and rarely because of funding rates alone. - $4.1 million Funding Review – to resource members of the ministerial ECE funding review group, examining how funding can be targeted to support parent workforce participation while “balancing quality with cost,” and for the Ministry of Education to support the group’s work.
This is huge amount of money to spend on a single funding review.
The funding review objectives risk normalising a trade‑off between cost savings and children’s safety and wellbeing. And, it also reframes ECE as childcare rather than education – something the Government has not done with schools. - $12.4 million Oral Literacy Programme – to produce resources, provide a programme to up to 525 centres, and develop tools to test children’s oral language development in ECEs.
It can be questioned why the funding was not directed toward improving teacher‑to‑child ratios, which directly support oral language development, and why the Government supported standardised testing of young children, which child development experts widely discourage. - $4.1 million Kōhanga Reo data administration – to improve the data capability of the Kōhanga Reo network and support them with data submissions to the Ministry
Budget 2024
- $191 million Sector Subsidies – a cost adjustment of 2% to sector subsidies for 30 Hours (under and over 2 yr-olds), 20-Hours ECE, and Equity funding.
- $8 million Food in ECE programme (over two years) – repeatedly described by Associate Education Minister David Seymour as a programme intended to provide free morning tea and lunches to up to 10,000 children aged 2–5 in low‑equity, not‑for‑profit, community‑based centres (using funding redirected from the schools programme).
However, many low‑equity centres missed out, while a significant number of participating centres were private, for‑profit businesses. The Government’s decision to award the $8 million contract to KidsCan without an open public tender raised concerns about transparency and potential conflicts of interest. - $13 million Playcentre Funding (over four years) – to support the sustainability of Playcentres.
