Higher subsidies for preschools with 100 per cent qualified teachers have been restored for the first time in a decade.

Prime Minister Jacinda Ardern and Education Minister Chris Hipkins have announced a $278 million funding boost over the next four years for early childhood education (ECE) services with fully qualified staff.

The long-awaited move, promised in Labour's 2017 election manifesto, had been expected in last week's Budget but was not mentioned in the Budget documents.

Chris Hipkins (centre) and Jacinda Ardern (left), pictured at a trades training centre on Friday, have restored a higher funding rate for preschools with fully qualified staff. Photo / File
Chris Hipkins (centre) and Jacinda Ardern (left), pictured at a trades training centre on Friday, have restored a higher funding rate for preschools with fully qualified staff. Photo / File

Instead, Ardern and Hipkins have confirmed it at today's post-Cabinet press conference. It is the latest of a series of Budget initiatives which appear to have been approved after the main Budget documents were prepared.

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Helen Clark's Labour government introduced a higher funding rate for ECE services with 100 per cent qualified teachers in 2005.

But in 2010 John Key's education minister Anne Tolley scrapped the higher rate, which was then $12.45 per child per hour for children aged 3 and 4, reducing all ECE services with at least 80 per cent qualified teachers to a standard $10.88 an hour.

Former education minister Anne Tolley scrapped a higher funding rate for fully qualified centres in 2010. Photo / File
Former education minister Anne Tolley scrapped a higher funding rate for fully qualified centres in 2010. Photo / File

Today's announcement will lift the current subsidy rate for children aged 3 and 4 in centres with at least 80 per cent qualified teachers by 6.2 per cent from $12.71 an hour to about $13.50 in kindergartens, and by 5.1 per cent from $11.82 to about $12.42 an hour in education and care centres with fully qualified teachers.

The higher rates for kindergartens reflect higher wages, even though the Budget provided $151 million over four years to lift the minimum pay rates of all qualified ECE teachers to the same as the minimum rates for kindergartens.

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The new funding rates will apply from next January 1 and will cost $278.2m over the four financial years to June 2024.

Early childhood centres, seen here at Active Explorers in Highbrook, will get higher funding if they employ 100 per cent qualified teachers. Photo / Michael Craig
Early childhood centres, seen here at Active Explorers in Highbrook, will get higher funding if they employ 100 per cent qualified teachers. Photo / Michael Craig

"Eligible centres will receive the increased payments in November 2020 advance funding to cover January and February 2021," Hipkins said.

He said only about 400 centres, or 13 per cent of teacher-led ECE services, employed 100 per cent qualified teachers at last count in 2018. Most of these are likely to be kindergartens.

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"This initiative rewards centres offering the highest quality education by ensuring all of their required teachers are fully trained teachers," he said.

"This funding boost comes at a time when Covid-19 is likely to lower demand for early learning services. This new funding band will encourage more centres to use fully trained teachers and keep them in work.

"Today's investment builds on the $320.8m investment in early learning announced last week, which focused on improving the pay of some of the lowest paid teachers.

"Reinstating the 100 per cent funding band is one of the top action points in the Early Learning Action Plan."

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