Consultation on early childhood education funding system

Meeting Recording: MAG consultation public hui Thursday 16 July 2026

Linda Meade   0:23
Welcome to those that are joining. We're just going to wait a couple more minutes just to make sure we get everyone…

Okay, so welcome and hopefully you're joining in the right place. This is the online webinar hui for Early Childhood Education Funding System Review Consultation Overview. So before we get started formally and head into introductions and the content.

Today, I'm just going to kick things off with a karakia.

Whakataka te hau ki te uru
Whakataka te hau ki te tonga
Kia mākinakina ki uta
Kia mātaratara ki tai
E hī ake ana te ataakura
He tio, he huka, he hauhu
Haumi e, hui e, taīki e!

So, kia ora and welcome everyone. My name is Linda Meade. I'm the chair of the Ministerial Advisory Group, the MAG as we call ourselves.

My background is in professional services mostly. I was a partner at Deloitte until a few years ago, governance roles, but I also have an interest through ownership, or co-ownership, of two small early childhood centres based here in Wellington, where I live. 

I've got some other members of the MAG here with me today so I'm just going to ask them to introduce themselves before we get underway. So first of all, on my screen, I've got to my right, on my screen, Sarah Hogan, and then I'll let you pass across to other members, Sarah.

Sarah Hogan   3:28
Kia ora, as Linda said, I'm Sarah Hogan and I'm a member of the MAG. I'm an economist and my usual role is as Deputy Chief Executive at the New Zealand Institute of Economic Research. I'll pass on to Simon.

Simon Laube   3:43
Thanks, Sarah. Kia ora koutou. I'm Simon Laube. I'm chief executive at the Early Childhood Council, but on the MAG independently. Good to see some familiar faces on the attendees, and I really hope you make the most of the session tonight. Kia ora. Over to Kelly.

Kelly Seaburg   4:05
Kia ora, thanks, Simon. 

Kia ora, koutou. I have a background in education and literacy and numeracy education, and then in early childhood, so I've been in education for about 20 years. 

I guess the elements that I bring to the MAG is both having day-to-day understanding of running and owning early childhood services, but I also bring that educational lens from a curriculum perspective and also undertaking research for the University of Waikato into supporting early childhood services in low socioeconomic areas and looking into transition to school. So that's what I'm bringing to this MAG process as well. Ki ora.

Linda Meade   4:46
Thanks, Kelly, everyone. 

And we'll just flip back to the presentation because we've got a picture there of the rest of the MAG. There's only four of us here today, but there are two others who couldn't make it this evening to this online hui. And hopefully there'll be a picture that will flip up just in a second, but we've got on the far left when it comes up, Kylie Eagle. Kylie is the chief people officer at Fletcher Building based in Auckland, brings a very strong lens around workforce participation thinking and a particular interest in female workforce participation. We've got Melissa Glew, who is currently the chief financial officer at Auckland City Mission. When she joined the MAG, she was at that time the chief financial officer of Auckland Kindergarten Association, so Auckland based as well, strong interest in equity and child-centred thinking. 

So the screen's not showing me the picture. We move across to the next slide.

Right, thank you.

So I thought I'd kick off before we get into the options that are in our consultation document with just a little bit of a brief overview of where we've got, how we've got to the point that we've got to. So you may be aware that through 2025 and early 2026, we had quite an extensive period of both investigation, analysis, research from our perspective, using material that largely was provided by the Ministry of Education as secretariat to the MAG, and also quite an extensive phase of engagement. Through that engagement, we met with, we had about, I'm told, I didn't count, but 56 meetings. We met with around 700 people. We went to six regions, and we had online meetings as well. So at online submissions, we received about 150 submissions, mostly from teachers, managers and owners.

We also published a survey of everything we heard in, I think it was February this year, an engagement summary which is available on our webpage if you want to look at it. We also surveyed employers of parents, we surveyed teachers, and we surveyed families. And those surveys are also available online if you want to look at them. 

And so all of this work really provided us with a solid foundation of understanding what the problems and issues, challenges and opportunities there are out there facing the sector, facing families and the workforce, ECE workforce teachers and educators as we thought about possible changes to the funding system. So that's been our basis and the options that we've produced are really in response to that understanding. 

You can find all of the information that's been provided to us. We're proactively releasing that on our webpage. So if you want to go and have a look at that, you can do that too. 

So now we reach the phase we're in at the moment, on 30th of June, we published our consultation document after a lot of hard work by the MAG to try and distil down and come up with a set of options that we felt were a good representative start point for consultation purposes.

So I think at the highest level, that work that we undertook, we really needed to distil it down into some high level problem statements to organise our thinking. And so we came up in the end with three major problems, and I'm just going to go through them one by one. 

The first problem I'll just read off the screen.

Some whānau face barriers to accessing the type and amount of ECE they want for their tamariki. This is quite multifaceted. Cost, affordability, availability, location and service flexibility can affect children taking part in ECE.

So this is not just a problem about affordability, although of course that is very important. It's also a question of what's available in each community and whether the services that are available meet the needs of the Tamariki, families and more broadly their community. This is probably the problem that we spent the most time thinking about and considering and working out what sort of options might respond to it.

Go on to the next one. So the second problem really is a little bit narrower, not quite so multifaceted, and it's focused on quality. So what we found is that variation in ECE quality is likely to undermine the positive effects of ECE for tamariki and whānau, particularly for those who could benefit the most.

We didn't hear widespread concerns about pervasive problems with quality of ECE in New Zealand, and that's a good thing. However, what we did hear is that there's variability in quality, and there are a range of possible reasons for that. I'm not going to go into it here, but there's quite a lot of discussion about it in our document that you can read. What we do know from research is that tamariki from more vulnerable families, households, particularly those living in poverty, are those that are more likely to benefit from quality ECE. And that is something that we really wanted to think about quite deeply.

Then if we move on to the third problem, governments and whānau do not have enough information about ECE and the value it delivers for tamariki, whānau and society. And you'll notice here that it includes two groups in particular, government and whānau. So it's not just one or the other. Both are equally important in our view. 

Parents can't make the best decision about what ECE works for their family if they don't have good information. That's important. But equally, the reality is that we, the MAG, and government more generally, can't make really good decisions about what to invest in unless we have good data and evidence.

And in fact, the terms of reference, which you can find online, was very explicit about this being a problem. Ministers said that they need good information so as to better understand what return on investment they will get from increasing funding in ECE. This funding review provides us with an opportunity to make changes, so the system is fit for purpose for the future. Better information should hopefully provide future governments with the confidence to increase funding where it will make the biggest difference. And hence why we really thought this problem was worth elevating to our top 3.

If I move on now, just to come back to how did we develop the options, and then I'll go through them in a little bit more detail for you. So drawing on those three major problems, we developed a range of possible options across seven areas. Why seven areas, you might say? Well, you'll see in a minute, but essentially, the seven areas are a bit like an organising framework, so that you can read through the options and understand where we might be coming from in each area. They were, as I said earlier, these options were all developed in response to what we heard and what we read about the analysis, the research that we received. And in most cases, the options sit along a sort of a spectrum of change. Broadly speaking, you might say from modest change to more radical change, but they're not, each spectrum is different and we'll come to that in a minute.

I want to be clear that these are not our final recommendations. And even if when we do provide our final recommendations at the end of this year, and that's the plan by December of this year, decisions would need to be made by government. Obviously, there's likely, there's an election later this year, so that government will look different, no doubt, from what it is now. And though it is that government that will need to make those decisions next year, most likely.

This means that there might be no change, some change, or new ideas. All of these things are possible in each of the potential areas of change that we talk about. But we need your input to decide what change is best.

And the other thing I need to mention is that our terms of reference do require us to put forward fiscally neutral recommendations. In practical terms, this means that we will provide advice not only for individual recommendations for change, but also a package of recommended changes.

And some of those changes may not or will not benefit everyone. Unfortunately, that is the reality. Otherwise, we'd be sticking with no change at all.

Ultimately, though, the fact that we have to stick with fiscally neutral recommendations does not limit government. Future governments could of course decide to increase or change the amount of invest in ECE. That is their prerogative. It's just not part of our terms of reference. 

So during consultation, we're also asking if you can tell us where you think trade-offs could be made so that our advice for change can be delivered within the government funding that is currently available. 

We know that this is a hard task. We feel that too. But the more you can tell us, the better our advice will be.

So these are the seven areas of change that we think could make a difference. And in the following slides, I'll step through these. We hope that you'll read the consultation document, though, because I can't go through everything, unfortunately, in the time we've got available today. And when you do read the document, you'll see that the first part of the document provides a more detailed discussion of the problems we identified, the causes and effects. And then around the second half of the document goes through each of the 40 options that we've identified, organised under the seven areas of change. There's lots more material, context and detail, and it's available on the website to download, or we can e-mail you a copy.

Now, one thing I should say at this point is that you'll see at the top of your screen a questions button. And we really encourage you as I work my way through these, if you want to pop questions into that facility, please do so. And as we
get towards the end of the of my presentation, I will have, you know, you have the opportunity and I'll look to answer those questions as best I can.

So I'm just going to step through these one by one.

So the first area, and as you go through these, you'll see these little sort of spectrum diagrams appear on the screen. These are taken from our consultation document. And so when you look, when you read the document, you'll see these appear there again. Please don't take the placement of the options on the spectrums too literally. They do make an attempt to sort of place the options vis-a-vis current settings but they're not intended to be literal - illustrative only. 

The first area that we talk about here is improved targeted funding to services. And so this one really is targeted funding is provided in some cases to services based on assessment of need, and that's based on assessment of need of tamariki and whānau in those services in their community. And so you'll see them on the screen there, and there's three areas that we thought there could be some change in and some positive effects from change. 

The first one talks about updated measures of need. And in fact, that's not shown as a spectrum, that's just shown as the asterisks at the bottom there. But we thought that using the new equity index and isolation index would be a good thing to do. It would replace outdated measures that are no longer fit for purpose, and it would follow a similar change that was put in place in the school system a year or two back. And so we feel like that's a fairly obvious thing to do, but if you've got feedback on that, please do provide it to us.

The second potential area of change here is a simplification. Here's a simplification focus. So there's lots of little pots of equity or targeted funding, currently, there's equity A, B, C, D, E, not E, A, B, C, D, something called Targeted Funding for Disadvantage, TFFD, and also ATIS, which is based on isolation, as is Equity D. So there's an opportunity here to streamline these, if you like, to rationalise, to make it less complex, easier to understand and administer. So think about that a little bit differently. We've got some options there. Please do have a look at them and give us your feedback. 

The second area is about whether there's, no, I haven't moved on to that one yet. Sorry, thanks. 

Sorry, the third area in the bottom spectrum there is about the level of targeted funding. So again, still talking about the sort of equity pots, but at the moment, they're quite a small amount of funding that goes directly to these services based on their needs. And we think it could be possible to increase that, but we don't know by how much. And so we're really looking for your input into whether you think increasing their equity or targeted funding by a small amount, a moderate amount, or a more significant amount is something you would really support. Keeping in mind that if we obviously increase this funding, then we'll need to look for other places to where we might reduce funding. And, you know, so that's just a really clear advantage of what I was talking about earlier with the fiscal neutrality requirement.

So, move on to the next one now. So the next one is also about targeted assistance, but this is targeted assistance that goes to families or supports families, whānau. And so we've called it fee assistance. And so another way of thinking about this, of course, is thinking about how we might make changes to the current childcare subsidy administered by the Ministry of Social Development, MSD, and/or to the Family Boost rebate scheme that's administered by Inland Revenue.

So we think there's some possible changes here and we're interested in feedback on whether we could make it more flexible and accessible. We could potentially look at reducing reassessment requirements, for example, activity testing, increasing the number of non-activity tested hours. At the moment, that's a maximum of nine for the CCS, and potentially even increasing the level of fee assistance overall available to families. So that's sort of about flexibility and accessibility. The second area that we could think about there is how do we think about the level that the income testing thresholds are set at. So affordability and access, and what does that mean for low-income households and those that face the greatest barriers to participation? 

And then finally, something that came up quite a lot during our engagement was how does Family Boost and Childcare Subsidy interact with each other? Could they or should they be more aligned? Should they more consistently or equitably simplify fee assistance for low-income families? So we're particularly keen on feedback in the space. It's quite a complex area to think through and so really encourage you to ask any families, whānau you know, who might only want to provide us feedback on this one area, and that's completely fine, to send us their feedback, not just services and people working in the sector.

So the next area is, I'll just move on to the next one on the next screen. So this one looks at universal subsidies, which don't change regardless of the characteristics of the family or the community. So these are the funded child hours subsidies that go directly to ECE services. And in this space, we did I had quite a lot of feedback during engagement on views around flexibility in the space and simplicity as well. And so we sort of developed three, or there's two spectrums on the screen there, and then there's a third one that I'll mention as well. 

So the first one is around flexibility, and in particular around daily funded hour caps. You'll be aware, most people, I'm sure, that it's currently fixed at six hours maximum per day. And so one of the options there is about extending that to eight hours, because we heard from quite a lot of people that six hours really doesn't reflect sort of modern working family lives at the moment, and that, you know, perhaps eight hours would be more appropriate. The second area is just more of a simplification. At the moment, we have a scheme, two different funded child hour schemes. One is the sort of underlying 30 hours that are applied to any child, regardless of age. And then of course, there's the 20 hours ECE that is only attracts funding for children aged three to five. These are currently funded on slightly different bases. And although many people might not realise that, it does actually make quite a difference to how the funding works. So the 30 hours is funded on a place-based approach, which essentially says a service is funded for a licensed place, so long as there is a child enrolled in that place. Whereas the 20 hours ECE for three to five year olds is funded on a child-based approach. So one of the things that we are asking you to think about and come back to us with your thoughts on is if we aligned these one way or the other, perhaps move the 30 hours to a child-based approach, for example, what difference would that make to services and how do you think both services and families might react and how might the benefits and or costs flow as a result of that sort of change.

Onto the fourth area. So the fourth area looks at the certificated teacher funding bands. So this is the 80 percent and the 100 percent funding bands and how these operate. So we thought about some options in this space as well in response to feedback. And one of the things that we were told was that would be desirable if there was more flexibility in some of these settings. And so one of the options that we've put forward there is we potentially could adjust the 100 percent funding band to make it more flexible. We could remove it. We could make the system easier to navigate and reduce compliance and administrative burden by replacing current staffing calculations. So this is sort of the staff hour count and think about a more straightforward approach to assessing the proportion of qualified teachers that are working with children at any given time or during a day or a week. And then the final one was really to take that concept a step further and think about how flexibility could be introduced to really expand what it means to be delivering quality teaching by thinking about broader things like professional development, planning time, and other things that teachers do every day, every week to support quality teaching and learning, which doesn't always involve face-to-face interaction with children. And so there's another option there for you to look at and think about in that space and give us feedback on.

If we then move on to the fifth area, this is about possible changes to how government provides funding to support workforce pay. And so this covers areas such as the current pay parity scheme, but there's also an option there that considers
kindergarten teachers as well.

So sort of a, this is probably the one where we've got the widest variation across the spectrum you can see there. So at one end, we're thinking about increased flexibility of ECE pay by allowing greater scope for employers and teachers to negotiate remuneration progression, leadership arrangements. So that's kind of one end of the spectrum that would perhaps take things closer back to what existed before the pay parity scheme was introduced but not change things for kindergarten teachers. We could also look at simplifying the current pay parity framework. So we've got one that's quite complex at the moment. And we've heard from many people that although there have undoubtedly been benefits in terms of increased pay for teachers working in education and care services, that the current opt-in scheme is not really seen as viable as a long-term proposal so more flexibility in simplifying it. And then finally, we could be more ambitious. And so we really want to hear whether you think this is worth exploring further. And by ambitious, I mean we could explore a more consistent sector-wide approach to workforce settings that could bring greater alignment across pay, career progression, and funding arrangements across different ECE service types. So that is including kindergarten teachers and teachers and potentially educators too in other centre-based ECE services.

The sixth area of possible change looks at information and reporting. And this one's probably the most simple to understand, but still we're super keen to hear your feedback on it.

Information, obviously, as I've mentioned already, is really vital to helping people make good decisions, and not just collecting the information, but also reporting it in ways that people can see and understand and use. And so making it transparent and visible. So one of the things that you'll see there is about how we collect it, and the other area is how we report on it. And I would say, just as an aside, really, that the MAG found this to be quite a barrier in many respects to how we've gone about developing our thinking. Information and evidence isn't always as good, comprehensive, up-to-date, or accurate as we'd like it to be. And that has proved a bit of a constraint on how we've been able to progress our work. And that really sort of reinforces for us why this area is actually quite important to do better in.
It may be an area that you don't feel strongly about, but if you do have some thoughts on it, we definitely welcome hearing them.

And then the last seventh area is looks really at how we can simplify the administrative burden. So this is probably a bit more focused on services themselves. And you'll be aware that at the moment there are some digital processes, but they're not always very well integrated.

So, could we use digital integration at system levels? Could we simplify processes to reduce paperwork, both for services and indeed for families? So, things like, you know, the frequent absence, medical sign-offs, and that sort of thing. Could we reduce administrative burden, streamlining reporting requirements, simplifying some of those absence processes, making financial reporting easier or at least more consistent? 

And then finally, down the bottom there, I know it might seem a little bit niche,
to some of you watching, but there are hospital-based services and we want to look at whether we could change how hospital-based services are funded.

And while I'm on that, actually, it just reminds me that I skipped over one earlier on, which is that we really want to hear about any thoughts that you have on home-based education as well, because we're very aware that home-based education funding is largely funded through the same sort of mechanisms that centre-based funding is. And we're not, we've heard from many people that that really doesn't work that well for the home-based sector. And we're keen to hear any feedback or thoughts that you have on how that could be improved.

So, you know, what are we asking from you? So, you can tell us as much or as little as you want to. We have no preconceived ideas about what those submissions might look like. So we have got a survey that we're asking as many people as possible to fill in, but you don't have to fill in the entire survey. You could just fill in several, you know, one, two, or as many sections as you like of that survey. You can fill in the survey and send us an e-mail submission. You could just send us an e-mail submission. All of those things are in scope. We are really keen to hear what, you know, we've identified these seven areas of change, are they right? Are there others? What options do you support, oppose? Why? Give us your thinking and your rationale so that we can really understand what the impacts, benefits or costs might be that you can see rising. Any new ideas or anything else that you think we should know, we want to hear it.

Now, for example, you might want to tell us about transition arrangements and what would work for you in that space. We know that, you know, things and we won't be making recommendations for anything to change overnight or immediately. So what are some of the considerations we should take into account in terms of a transition to any future change?

I mean, I think overall what I would say is this is our chance to get the settings right. And if we do that well, if we get the funding system fit for purpose and provide services and families with that stability and certainty around funding, that's pretty important because the sector is pretty wary of change. And if we can do that and do that well, then future governments will have that confidence to invest.

So how do you have your say? Well, I've already mentioned that through the surveys or online by sending us an e-mail. Consultation is open until 6 August. This is the last of our scheduled online hui. If there is demand for or appetite for more, then we're more than happy to run more. We'll see what we hear back. There's also some videos online and other various ways that you can read about things online. This video, as with the other hui, has also been recorded today so we can pop that up online for others. So if you do know other people who perhaps weren't able to join any of the hui but want to see them, please do encourage them to get in touch with us or to pop on to our web page and have a look, you know, re-watch the video.

So, with that having been said, I'm just going to see if we've got any questions here.
Excuse me while I just refresh my page here to see whether any questions have come through. Doesn't look like we do have any questions. Is anyone wanting to pop any in? Otherwise, we'll finish the hui and let you get on with your evenings.

But I'm hoping that if you do want a copy of our consultation document, you can use the question function or just e-mail us to ask for a copy of it to be sent to you by email. Otherwise, of course, you can download it from our webpage.
So if there are no further questions, I will wrap things up. 

I'm just going to say a final karakia, and then you can get on with your evening. Thank you so much for attending.

Kia whakairia te tapu
Kia wātea ai te ara
Kia turuki whakataha ai
Kia turuki whakataha ai
Haumi e, hui e, taīki e!

[Music]

Kia ora and thank you for taking the time to hear about the work we've been doing reviewing the Early Childhood Education funding system.

Over the past year, the MAG has been listening to families, to teachers and educators, to providers, and to others with an interest in the ECE system. We've undertaken research. We've analysed data and we've commissioned other work to help us understand how well the current funding system is working and where improvements could be made.

We've identified three major problems with the current funding system.

Firstly, families can't always get the amount and type of ECE they want for their tamariki.

Secondly, variation in the quality of ECE means it may not deliver all the benefits it can for children and whānau, particularly those who could benefit the most.

And thirdly, there isn't enough information about how money spent in ECE is used or the value delivered by government funding.

We have identified seven areas where we think change could make a difference. The consultation document sets out a range of possible options alongside the option of not making any change.

Importantly, we haven't made any decisions or recommendations. Firstly, we want to hear from you.

What do you think might work well?
What concerns do you have?
And what impacts do you think possible changes could have?

Before we provide our final advice to government later this year, we want to hear from you—parents, providers, the ECE workforce, employers of parents, communities, and anyone else who cares about ECE or has an interest in it.

Your feedback will help shape our thinking and inform our advice.

Here's how you can find out more about our work, areas and options for possible change, and how you can provide feedback.

Thank you for taking the time to think about the future of ECE funding. We look forward to hearing your views.

[Music]

I’m Sarah Hogan, a member of the Ministerial Advisory Group that’s been asked to provide advice to government on the way ECE funding is used.

As an economist, I know that ECE helps to lay an important foundation in children’s lives, helping them to be healthy, happy, and productive throughout their lifetimes. It also supports parents to be able to get to work and earn the income that families need to thrive.

Along with the other members of the MAG, I’ve heard from many people who care for children and for communities. We’ve commissioned research and we’ve done our own work to understand what changes could help improve the ECE funding system.

We’ve identified three major problems.

Families cannot always get the amount and type of ECE they want for their tamariki.

Variation in the quality of ECE means it may not deliver all the benefits it can for children and whānau, particularly those who could benefit most. There also isn’t enough information about how money spent in ECE is used or the value delivered by government funding.

We’ve also identified seven areas where change could make a difference. This doesn’t mean we’re going to recommend change in all these areas. Your feedback will help us to finalise our thinking.

We want families and communities to know that if these changes were confirmed, it could make a difference to you and your tamariki. For example, more funding assistance could be made available to those families with greatest need.

We’re also looking at ways to make ECE more available to all whānau, including looking at the hours of ECE for which funding assistance is provided.

But before we provide our advice, we want to hear from you about what’s important. Have we got the areas for change right? What would these options mean for your whānau? What have we missed?

Your feedback will help shape what happens next.

You don’t have to give us feedback on everything in the consultation document unless you want to. You can focus on what matters most to you and anything you think we should know.

Thank you for being here. Please do tell us what you think.

Kia ora and thank you for taking the time to join me. I'm Linda Meade, chair of the Ministerial Advisory Group for the review of the early childhood education funding system.

Some of you may know me through my involvement in the ECE sector over many years. That experience has shown me the enormous value of ECE to tamariki and whānau, but also some of the challenges faced by providers and those who work in the ECE sector.

Over the past year, the MAG has met with and talked to many people from across the sector. We've reviewed research, analysed data, and commissioned other work to help us understand where the challenges are in the current system and where improvements could be made.

Through that work, we have identified three major problems. Firstly, families cannot always get the amount and type of ECE they want for their tamariki. Secondly, variation in the quality of ECE means it may not deliver all the benefits it can for children and whānau, particularly those who could benefit most. And thirdly, there isn't enough information about how money spent in ECE is used or the value delivered by government funding.

We have identified seven areas where potential changes to funding settings could make a difference. Within each area, we've described a range of possible options. It would also be possible to retain current settings. Importantly, we have not reached any conclusions on recommendations.

As we all know, ours is a diverse and complex sector. What works well for one service, community, or provider type may not work well for another. That's why we need your help. We want to understand what the options we describe might mean in practice.

Which ideas would you support, and which raise concerns? Are there unintended consequences we should be thinking about? Are there opportunities or risks we have overlooked? No matter what role you're in, your experience and insights are valuable.

Your feedback will help inform advice we give to government later this year.

Here’s how you can access more information. Thank you for your time, your commitment to early learning, and your willingness to contribute to this important conversation.

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