Public Funding for Early Childhood Education

IBISWorld forecasts public funding for early childhood education to rise by 12.3% in 2024-25, to reach $3.01 billion. Funding growth in the current year is expected to be driven by greater numbers of children attending Early Childhood Education (ECE), lifting the number of places eligible for government funding. Additionally, the 2023 Budget allocated a significant increase in ECE funding to extend the 20 hours of free early childhood education to 2-year-olds. The increased funding also includes higher salaries for staff working in ECE.

Attendance at ECE is not compulsory, but is available for children from birth to school entry age. The Central Government (Te Kawanatanga o Aotearoa) subsidises attendance primarily through the ECE Funding subsidy, the 20 Hours ECE and the Equity Funding programs. Through the ECE Funding subsidy, the Central Government finances ECE for all children for up to six hours per day, to a total of 30 hours per week. The 20 Hours ECE Funding policy is a higher rate of government subsidy, covering two to five-year-olds for up to a maximum of six hours per child per day, to a maximum of 20 hours per week per child. Equity Funding is designed to improve access to ECE in specific communities by delivering additional funding to eligible operators. For a community, the extent of isolation, the level of socio-economic achievement and the number of children with special needs and from non-English speaking backgrounds determine eligibility and the amount of Equity Funding a provider in the community receives. As of December 2023 (latest available data), 95.6% of New Zealand children attended ECE.