Spending on early childhood education and schools is to top $10 billion a year - but is not enough to avoid parents paying more for pre-school, an industry body claims.

A boost in early childhood education (ECC) funding and millions spent to set-up previously announced school leadership positions were key education features of yesterday's Budget.

The Government said the new spending on schools and ECE totalled $857 million over four years, with 12 per cent of that coming from cuts or re-prioritised education spending.

Education Minister Hekia Parata told the Herald the new spending would help lift student achievement, and push towards the government's target to get 98 per cent of children in ECE.


Some of the $156 million in increased ECE funding would boost subsidies to providers, and the rest would cover the cost of increased enrolments and hours.

However, Early Childhood Council chief executive Peter Reynolds attacked the subsidy increases as a deliberate deception that will push-up charges for parents and reduce quality.

Salaries were a big cost to centres, and the subsidy related to that had increased by less than 1 per cent, Mr Reynolds said, which was below inflation and "another funding cut in drag".

Ms Parata rejected that, and said ECE care was 33 per cent more affordable as a proportion of household income than 2007. Government spending on the sector had almost doubled since 2007/08.

"Parents can see from the Budget that the Government has allocated over $155 million [extra ECE funding]. That is a significant chunk of change over the next four years."

She said a 2 per cent increase to school operation grants - the money given to boards of trustees to help run schools - was ahead of inflation and would help take financial pressure off schools.

However, that was dismissed by an education union. NZEI president Judith Nowotarski said other costs had risen as schools tried to deliver the modern education expected by parents.

Schools were being asked to drive children's education on "the smell of an oily rag" and donations and fundraising from schools would be remain crucial.


Yesterday's Budget also gave an extra $2.5 million over this financial year to a programme providing computers in homes and digital literacy training for low-income families.

At the tertiary level, new spending focussed on science and agriculture, with subsidies for enrolments in those courses upped by $83.3 million over four years. There were no increases for other courses.

Notable new spending:

• $359 million over four years to create new executive roles for high-performing teachers and principals (announced previously).

• Schools will get a 2 per cent increase in their operations grant from 2015, costing $85 million over four years.

• $284 million over four years on new school property spending, including new schools.

• Early childhood education services get a $156 million increase over four years, much of it to cope with growing numbers.

• Subsidies for tertiary enrolments in science and agriculture upped by $83.3 million over four years.