Wellington, June 19,2023
The government is tweaking the 20 hours’ free early childhood education policy, announced in Budget 2023, based on the feedback received from early childhood education providers.
“The intention of the 20 hours’ free early childhood education initiative was to lower the cost to parents, not to have an impact on the service’s financial position,” Prime Minister Chris Hipkins explained in his post-Cabinet media briefing today.
“While it was always our intention to work with the sector to bed the policy in ahead of the 2024 start date, we have heard some of the concerns that have been raised loud and clear, and we’ve been moving quickly to remove any uncertainty the sector might face,” Hipkins added.
He said the Ministers have written to Early Childhood Education sector leaders to confirm that “We’ve removed the specific funding condition that would require services to take enrollments for 20 hours’ a week only when they were requested by parents to do so.”
The Budget had extended 20 hours’ free ECE to two-year- olds. Today’s announcement “removes a complication” that made it difficult for ECE providers to do that “in a financially viable way.”
But ECE services still needed to provide transparency to parents around fees and the government subsidies they are receiving, the PM noted.
“Services will still need to provide clarity to parents about what they are being charged for and provide the Ministry of Education with their fee schedule data, and they will still be required to charge these hourly,” Hipkins said.
The prime minister conceded that the ECE sector had not been consulted specifically about the extension to the free hours for two-year-olds “because obviously it wouldn’t be much of a Budget secret if we were telling everybody about it before the Budget.”
He said the measure was put in place to introduce transparency in the process to help parents understand “how their 20 hours’ free is being applied.”
The ECE centres were required to charge by the hour rather than a daily fee.
The centres will still need to charge by the hour, but “they will still be able to bundle the 20 hours’ with paid hours’,” the PM noted.
Hipkins admitted that smaller ECE centres found it difficult to implement the policy change.
“I think they’re not wild about the idea of transparency, but I think they can live with it. This was the stumbling block for them.”
Prime Minister Chris Hipkins also announced increases in paid parental leave support over and above the allocation set apart for this sector in Budget 2023.
From July 1, new parents will get an additional $51 per week as the weekly paid parental leave payment goes up from $661 to $712 before tax. That adds up to an extra $1,327 for those taking the full 26 weeks of paid parental leave, the prime minister said.
Self-employed parents will get a minimum of $227 per week, which is equal to 10 hours of the minimum wage for an adult worker.
Budget 2023, bowing to parents who stood to lose while taking time off work to look after a new child, had announced a 3% government contribution to the KiwiSaver payments made by new parents while on paid parental leave.
Venu Menon is an Indian Newslink reporter based in Wellington