By Kate Chapman of NZPA
Wellington, May 21 NZPA - Parents may have to pay more for early childhood education (ECE) but Finance Minister Bill English says changes were necessary now to avoid "drastic decisions" in the future.
Estimates of the possible fee increase range from $25-$42 a week per child after the budget was released yesterday.
The ECE scheme was introduced by the previous Labour government and paid for 20 hours childcare a week.
The budget allocated an extra $107 million to be spent on ECE in 2010-11. However, an additional $295m will be saved by reducing the financial incentive to have over 80 percent of teachers registered.
ECE providers were encouraged to have up to 100 percent registered teachers and get higher funding for them.
From February, the funding rate will be lowered and only given up to 80 percent of a provider's registered teachers.
Of the 4300 ECE providers, 2000 have more than 80 percent registered teachers.
Mr English said today while there were no plans to reduce spending on ECE the Government needed to contain the growth in its cost.
"There has been very significant spending in early childhood, that's been a big benefit to families and we want to make changes that will mean we can maintain that significant level of support, there's a risk that is we just let spending run away that down the track there'd be more drastic decisions have to be made."
The system needed to be more transparent so that parents and the Government could see what was driving the costs up, he said.
"It's yet to be seen just what would be passed on (in fee increases) because I think it'll take a while for the early childhood centres to work out just what's happened."
Prime Minister John Key said some providers may choose to stay with over 80 percent registered teachers and "potentially increase fees".
"But I think you will see less of an increase there than some may predict."
New Zealand Educational Institute vice-president Judith Nowotarski said parents of 92,000 children in the 2000 centres would be left to pick up the funding shortfall.
Childcare Association chief executive Nancy Bell said providers with 50 children would lose $109,000 a year in funding and more than 93,000 children would be affected, she said.
"Most parents will simply not be able to afford these changes and this will lead to children being taken out of ECE."
Labour leader Phil Goff said fees would have to increase or the quality of ECE be reduced to accommodate the changes.
Of the $107m extra funding, $91.8m over four years was for five projects that would focus on Maori, Pacific Island and low socio-economic children.