Budget 2022 – What’s in it for Early Childhood Education?

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NZ Government Budget Announcements for Early Childhood Education

Budget 2022 Commentary and Analysis.
May 19, 2022.

There are slim pickings for early childhood education (ECE) in this year’s Budget.

The Government has failed to deliver even enough for the early childhood sector to stand still without seeing further decline in the quality and safety of provision for infants and young children.

Key issues that need to be addressed to strengthen parent confidence in using ECE and to attract well-qualified ECE trained and experienced teachers back to the sector, weren’t even addressed.

Early childhood education financial and money matters

Here’s a list of the items for early childhood education in this year’s Budget :

  • Funding of $31 million in 2022/23, with $231 of total operating over the next four years for a cost adjustment to funding rates – a 2.75% increase in subsidy rates.
  • Funding toward progressing pay parity for teachers in education and care centres to edge toward the funding that kindergarten associations receive – $24 million in 2022/23, $70 million in 2023/24, $81 million in 2024/25, $84 million in 2025/26. Read more about the new salary attestation rates, with Pay Step 6 coming in from 1 Jan 2023 (it was meant to come in on 1 Jan 2022) and the setting of pay rates lower than kindergarten teachers for Steps 7 and above.
    • Some funding for teacher pay is being held in contingency to support pay parity for Kōhanga Reo kaimahi. The contingency amount is being kept secret by the government at this stage.

A cost-adjustment to subsidy rates will be welcome news for many overstretched ECE services struggling with meeting higher costs. But for some services it will not be enough of a funding increase to keep them from increasing parent fees or looking at how they can further cut back on staffing and other spending.

It is welcome news in particular for ECE business owners worried about diminishing returns. However the small increase of 2.75% is unlikely to be enough for business operators that have to pay higher lease costs tied to the CPI. The CPI is running at 6.9%.

Why haven’t key issues for ECE been addressed in this year’s Budget? It would seem that the Government is more focussed on what they see as the bigger issues such as climate change and housing. In the education sector the Government is focused on funding more early intervention for school-age children, including mental health, challenging behaviour, and staying engaged in learning programmes – which would not be needed if better attention was paid to the earliest formative years of children’s development.

These items follow on from Budget 2021 that provided:

  • a 1.2 percent cost adjustment to all funding rates for all services except home-based services on the standard rate.
  • additional funding only for education and care centres to pay their teaching staff at least on the bottom 6 pay steps for a beginning teacher: 29 million in 2021/22, 53 million in 2022/23, 54 million in 2023/24, and 55 million in 2024/25.
Child looking over gate

And here are just some of the many issues identified by respondents in this year’s pre-Budget ECE Sector Confidence survey, journalists reporting the media, and by the Office of Early Childhood Education:

  1. Pay parity for all ECE teachers with kindergarten and school teachers.
  2. Ensuring teaching staff in centres are ECE trained and qualified.
  3. Providing help to small services and community-based services as these are struggling in the current policy and funding climate compared with large and corporate services.
  4. Improving adult-child ratios, especially for infants and toddlers
  5. Addressing group/class size and large numbers of children in centres
  6. Tightening the rules around 20-Hours ECE funding so all families can access 20 Hours ECE for free and without enrolling and paying for additional hours.
  7. Providing the Ministry of Education with the resources to monitor ECE service compliance with regulations, e.g. bi-annual licensing inspections and unannounced spot checks.

Can we hope these issues will be addressed in some way either before the next election or if there should be a change of government?

About ‘Pay Parity’

Unless pay parity is provided to all ECE teachers in all ECE services then simply increasing the budget allocation amount for pay parity will not be effective in addressing staff retention problems and thus raising the quality of ECE for children.  It is optional for centres to pay their teaching staff on the bottom steps of the base salary scale so many eligible teachers are missing out.  The sector is losing its experienced teachers who are worth much more.

Last year, Dr Sarah Alexander predicted that the targeted spend in Budget 2021 on lifting the wages of only the lowest paid teachers would negatively impact on the retention of experienced teachers. Her prediction has come true. Any bargaining power experienced teachers had before has been removed as a result of Ministry of Education advice to the government defining fair pay as being on the bottom steps of the teacher base salary scale. Experienced teachers do not see that improvements in pay will come to them anytime soon.

Respondents to this year’s pre-Budget ECE Sector Confidence survey reported major issues with how ‘pay parity’ was being implemented and felt that the Ministry of Education was gatekeeping and delaying all but some beginning teachers from receiving pay parity, examples of comments included:

  • “Why can’t we be funded like the Kindergarten Associations? Happy to sign on a dotted line so to speak. I want Pay Parity for my staff but can’t afford to do so… keep coming up short of $$$”
  • “The opt-in for 5 steps of pay parity has caused further division between services in the ECE sector – it should be compulsory for all.”
  • “Centres can claim the funding and attest to paying their staff up to pay Step 5 but getting centres to pay individual staff at the correct level for them is a challenge.”
  • “I won’t benefit from it. Apart from working part-time meaning I won’t generate enough hours to ever climb the parity ladder for years my manager has said pay parity will now mean we must cover the costs of teacher registration, first-aid training, etc, leaving me paying more and earning less (my manager says this is the new standard in the sector).”
  • “It doesn’t look like it is coming for those of us with many years of experience and in positions of responsibility.”

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