School principals are welcoming a Budget that just keeps up with inflation and population growth, but are disappointed that not much has been done to overcome a desperate teacher shortage.

"We are not going backwards - great!" said Secondary Principals Association president Mike Williams.

"But the teacher supply situation is our number one concern. There is a little bit extra for teacher supply and the voluntary bonding scheme, but quite small amounts added to what is already in there."

The Budget has increased operational funding per student for both schools and early childhood education by 1.6 per cent from next January, in line with inflation which is expected to accelerate from 1.4 per cent in the year ending next month to 1.8 per cent in the year to June 2020.


But it contains no new measures to overcome the teacher shortage beyond a package announced last December. A spokesman for Education Minister Chris Hipkins said: "This new funding extends the funding provisions from that package – out to four years."

There's an extra $332 million in capital spending for schools over the next 10 years but only $1m of that is allocated for 2018-19. A paper prepared by former Education Minister Nikki Kaye last year said capital spending for schools would need to double from $160m to between $300m and $350m a year to keep pace with roll growth in Auckland alone.

However the Budget has funded significant increases in learning support for students with special needs, including:

• Ongoing Resourcing Scheme (ORS) funding for an extra 1000 students on top of the 9049 who were in the scheme last July, costing an extra $22m in 2018-19, rising to an extra $44m by 2021-22.

• Lifting the hourly subsidy for teacher aides "closer to the rate schools are actually paying", costing $6m in 2018-19 rising to $24m by 2021-22.

• Hiring more teachers and other professionals for deaf and blind children, costing $7.5m a year.

• Expanding the numbers in the Intensive Wraparound Service for children with the most extreme needs from 335 to 365 from July, costing $1.2m a year.

Post Primary Teachers Association president Jack Boyle said the Government was rightly prioritising learning support and early childhood funding, but he was disappointed that there was nothing new to solve the teacher shortage.


"The one thing we were looking for as a workforce that seems to have somehow not made it into this Budget is the significant challenges we have in recruiting and retaining the teachers," he said.

"To be frank, with the pre-Christmas package to try and redress the shortages in the workforce which was forecast by the minister as a starting point, to then see a Budget where the same initiatives are going to continue to be funded, with no new thinking - it's not enough investment to really make an impact."

He said the teacher unions would now have to tackle the issue through pay negotiations due to start later this year.

NZ Educational Institute president Lynda Stuart said the new spending "failed to deliver more than a minimal patch-up on the foundations of education that have been neglected for the past decade".

"The Budget reflected hardly any of the needs we identified to rebuild the foundations of education, and there was no sign of the return to funding early childhood centres with 100 per cent qualified staff," she said.

Early Childhood Council chief executive Peter Reynolds said the 1.6 per cent increase for early childhood education centre universal funding was "significantly underwhelming" in the context of teachers' pay claims.

"This Budget forces down quality," he said. "It will further drive centres to think long and hard about how many qualified teachers they can afford to hang on to if wages go up by 16 per cent and government funding only increases by 1.6 per cent."

Kaye, who is now National's education spokeswoman, said the Budget failed to deliver anything at all on key Labour election promises such as paying schools $150 per student per year if they stopped asking parents for donations.

"There's no additional funding for careers, no additional funding for counsellors, no vocational award funding," she said.

However Finance Minister Grant Robertson defended the 1.6 per cent operational funding increase, saying it was an increase and Labour was allocating funding to other areas in schooling that impacted on operational funding, such as learning support for children with learning challenges.

In total, the education budget will be $12.26b, up from $11.85b in the year to June.

Hipkins said it was a "solid start" after tighter investment over the past Government.