Budget 2023: Many in early childhood sector up in arms over Government's announcement

Three-quarters of the early childhood education sector wants an urgent meeting with ministers - they want the 20 hours free policy reconsidered, calling it unworkable.

They say the multi-billion dollar Budget boost was sold as a Ferrari, but instead it's a lemon and will mean fees have to increase or centres close. There are also calls for the whole sector to be reviewed.

There was nothing baby about the Budget's $2 billion early childhood boost.

New Shoots childcare centre director Kelly Seaburg said it's thrilled about the funding being extended to two-year-olds.

"The difficulty we have is the conditions that are being wrapped around that funding," she said.

Seaburg said the big issue is the number of little people to teachers as 20 hours free is funded at a ratio of one teacher to 10 two-year-olds.

"That's simply unsafe and it's simply not quality."

Seaburg said in reality there are more teachers looking after fewer kids.

There were also conditions for the centres which opt into the scheme, they must set their fees by the hour and 20 hours free means 20 hours free, no strings. Centres can't force parents to enrol their children for longer to receive the subsidy.

Centres also have to publish how their fees are made up. The Government did this because some centres are making many millions a year.

"There is in no way an aspect of profiteering involved in this at all," said Seaburg. "This doesn't work for anybody."

But Prime Minister Chris Hipkins expects it will make a "big difference to households". 

"That's one of the reasons we're extending it to two-year-olds but, of course, we'll continue to work with the sector to make sure the implementation details of that are right," he said.

National's Nicola Willis said it was "slapdash for the Government to make such a bold promise without having seemingly working through any of the detail at all".

The 20 hours free doesn't kick in until March next year and was partly so the Government could sit down with the sector to work through the details. But some want the entire funding model reviewed and rewritten.

Because currently it's "very complicated", according to academic Sue Cherrington from Victoria University's Institute of Early Childhood Studies.

She said the system is framed around caring for children while their parents are at work instead of being focused on what children need - which could be early childhood learning for a few hours or days a week.

"What I think the sector needs is a comprehensive review of the early childhood funding model," she said. 

It's a challenge to the Government to reform yet another sector.