An early childhood centre owner says that the Government's funding for the sector will cause more harm than good due to the restrictions placed on its use.
$1.2 billion dollars to subsidise 20 hours of childcare a week for 2-year-olds was meant to be the jewel in the Budget crown for Labour.
However, things have turned sour with the early childhood education (ECE) sector now saying the conditions attached are impossible to grapple with.
Newshub Nation's Simon Shepherd sat down with Kelly Seaburg, an ECE centre director, who explained the strings attached to the new policy could lead to higher prices and centres closing down.
Seaburg said while the sector "is absolutely thrilled with this investment", problems became apparent when they began looking into the detail.
"We realised our ability to actually implement this successfully for the Government is being thwarted by the conditions attached to the additional funding."
Organisations representing most of the 4579 early childhood services said the new rules meant they could not ask for copayments for things like food and nappies. They also could not require enrolment for more than 20 hours a week.
"This effectively means the Government is asking centres to run at a loss," the groups said.
The crux of the problem, Seaburg said, is the Government only funds a ratio of one teacher to 10 two-year-olds.
"You can appreciate that is simply not safe," she said.
"We already staff our toddlers to a much higher ratio than that.
"If we can only utilise the Government's 20 hours subsidy, we would have no choice but to increase the number of children per teacher.
"That's not quality and that's not care."
Seaburg said this would even go against the Government's early learning action plan, which aims to "improve adult-child ratios".
Additionally, under the new funding model, parents are given complete freedom to use the 20 hours however they like.
If they only want to use two hours one day, the centre is left in a difficult position when it comes to staffing.
"If they wanted care between 11am and 1pm, how am I meant to fill that child's space between 9 and 11 in the morning and 3 until 5 in the afternoon?" Seaburg asked.
"We employ our teachers all day, so that's just not workable."
Associate Education Minister Jo Luxton told RNZ she acknowledged the sector's concerns and would like to meet with them to discuss the situation.
"The new funding conditions are about supporting parents. It's important to note that the funding rate has also been increased by 4.6 percent to support providers to continue to offer 20 hours [of] ECE to parents."
Luxton also said when she was an ECE centre owner, she was able to make the subsidies work for three to four-year-olds and it shouldn't be any different for two-year-olds.
Seaburg said, since Luxton owned a centre, "the whole dynamic has changed in this time and the increasing costs for early childhood centres have gone through the roof".
"Compliance costs, which are coming through from government changes, have made it much more difficult for services to remain afloat," Seaburg said.
"The key aspect about why it's more expensive for two-year-olds is because we need to provide additional teachers for quality care and education of toddlers."
Seaburg said centres fear, as the regulation currently stands, if they don't opt-in to the funding for two-year-olds, they lose the funding for three to five-year-olds.
"It's full opt-in or full opt-out."
The ECE sector fears this new funding could force the closure of already struggling centres instead of giving them much-needed help.
Seaburg said "there hasn't been any" consultation from the Government during the formation of the policy.
On Friday, senior minister Michael Wood said it's "always the case that, after a Budget announcement, you have to sit down and you have to work out the implementation of it".
"The changes roll out from April 1… so there's some time to sit down and work that through with them but, look, there's increased funding in here for the ECE sector as well so we have taken account of that," he said on Friday.
Wood was asked by AM host Ryan Bridge if it would've been smarter to ask the sector before the fact so the Government wasn't "so far off the mark".
"I disagree with that," Wood said. "This is normal 'grist for the mill' when you work these things through with these sectors.
"These are often sectors who have got their own balance sheets and they've got their own interests - you sit down and you work it through."
Seaburg emphasised the sector doesn't need any more money than has been allocated.
She said centres will always strive to provide safe and effective care for the children in their care.
"Our services will simply not put children's safety at risk," Seaburg said.
"These are people who fundamentally care about the quality care and education of children.
"The problem is that we are going to have to find other ways to stay afloat."
Seaburg said recently released figures show 719 centres have closed since June 2022, of a now current total of approximately 4,500 across Aotearoa.
"That shows you that services are already on the brink and this is just driving us further."
Watch the full interview for more.
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