The biggest losers in the Budget could be New Zealand's youngest, as cuts to early childhood education (ECE) threaten quality in the sector.
In yesterday's announcement, ECE will get an extra $107 million in 2010-11, increasing annual investment in the sector to $1.3 billion.
However, the Government will save $280 million by reducing the financial incentive to have qualified staff.
Previously, ECE providers were encouraged to have 100% qualified staff and received subsidies for them. This funding will be cut from February 2011 and centres will only receive funding up to 80%.
Education Minister Anne Tolley said the move was designed to "redirect funding to areas of greatest need, and manage the rapidly rising costs" of early childhood education.
University of Otago Childcare Association director Kay Lloyd-Jones was shocked by the announcement, which would cut $50,000 in funding from each of the association's centres.
"We believed that there was an aim to have the best-quality ECE for children in New Zealand, and we have been operating towards that. We've now been told there is no need for it."
Dunedin Community Childcare Association director Jo Ellis felt the association was being penalised for having quality staff. The "significant" funding cut would result in increased parent fees.
Estimates of the possible increase range from $25-$42 a week per child.
Other announcements included investing $91.8 million in community-led participation projects to engage more Maori and Pasifika children, and those from low socioeconomic areas.
The 20 hours scheme would continue and a $46.7 million cost adjustment would help providers meet increasing costs and reduce the need for fee increases.
