Newly trained early childhood teachers will get pay increases of up to 9.6 per cent in July as a first step towards putting all qualified teachers on the same pay scales.
Education Minister Chris Hipkins has announced that Thursday's Budget will provide $151.1 million over four years to lift the minimum pay rate for qualified teachers in private and community-owned education and care centres from July 1 to the same as the starting rate for kindergarten teachers - $49,862 a year.
"This funding boost goes some way towards levelling the playing field for early childhood centres looking to employ qualified teachers, but I do acknowledge that fully closing the gap between education and care services and kindergartens will be a challenge to be addressed over a number of Budgets," he said.
The move lifts minimum pay rates for non-kindergarten teachers by 6.5 per cent for those with a bachelor's degree plus an early childhood qualification, whose minimum pay is now $46,832, or 9.6 per cent for those with only an early childhood degree or diploma whose minimum is currently $45,491.
However these are the only the minimums that centres must pay qualified teachers to get state funding.
In practice, an Early Childhood Council survey last year found that qualified teachers in education and care centres earned averages of between $25.41 an hour with less than five years' experience and $28.30 with at least 10 years' experience, equating to fulltime salaries of between $52,853 and $58,864.
Although Hipkins said the increase in the minimum rates would "improve the pay of up to 17,000 qualified teachers", the immediate impact will only benefit beginning teachers - about 1000 domestic students who complete early childhood training each year.
The NZ Educational Institute said last year that qualified teachers in education and care centres earned on average 23 per cent less than teachers with the same qualifications in kindergartens.
That gap was expected to widen to up to 49 per cent for some teachers after kindergarten teachers won an 18.5 per cent pay rise over two years last year - keeping them in line with school teachers.
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The Government unveiled an Early Learning Plan last year which promised to develop "a mechanism that promotes more consistent and improved teacher salaries and conditions in the early learning sector".
The Ministry of Education said its recommended approach to achieve this was a sector-wide "fair pay agreement".
But the Government has yet to decide whether to enable such agreements, and Hipkins made no mention of any new mechanism.
Hipkins said education and care services would get a 2.3 per cent increase in their subsidy rates from July 1 to cover the costs of the higher minimum pay rates.
All early learning services will also get a 1.6 per cent ($123m) rise in subsidy rates from next January to meet other cost pressures, giving the education and care services a total increase of 3.9 per cent.
The Budget will also lift the "quality" funding rate for home-based childcare by 5.4 per cent ($36m) from January. The quality rate is paid to services where all home-based educators have at least a level 3 early childhood education (ECE) qualification.
"Home-based services on the standard rate with educators completing the Level 4 ECE qualification will also gain five hours of additional visiting teacher support per week, and funding will provide tertiary fees assistance for up to 2646 students that are not eligible for fees free," Hipkins said.
Playcentres will get a 7.6 per cent ($3m) funding increase over four years, and the Ministry of Education will get an extra $8m to monitor ECE standards.
Altogether, Hipkins said the extra $321m for ECE over four years "supports the move to higher quality early learning that prioritises the learning, wellbeing and identity of every child as set out in the Early Learning Action Plan".
The amount represents a modest start on what was said last year to be a plan to boost ECE spending by $5.5 billion over the next 10 years, implying a funding boost of around 30 per cent a year by 2029 on top of the $2 billion a year that taxpayers now give it.
There is no mention yet of funding for the two biggest items in the plan - restoring a higher funding rate for services with 100 per cent qualified teachers, and improving staff/child ratios.
It is also unclear whether the Budget will now deliver on other Labour education promises such as creating a new education support agency for schools within the Ministry of Education, and extending fees-free tertiary study from one year to two years.
Finance Minister Grant Robertson has said that new spending initiatives to meet the Government's five priorities, including improving child wellbeing, have been reassessed because of the costs of keeping businesses afloat during the Covid-19 pandemic.
"Unless they are meeting a core cost pressure, we have put them on ice," he said.