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The biggest early childhood group in the country is calling for a boycott of the Government's plan for free childcare, saying it is dangerous and "the biggest threat to the quality of early childhood education in our generation".
The Early Childhood Council - whose 1000 centres make up nearly half of the country's preschool facilities - has sent a memo to its members urging a blanket rejection of the policy, under which 3- and 4-year-olds will get 20 hours of free childcare a week.
It says the policy leaves centres reliant on "optional charges" and donations to make up the shortfall between what the funding provided and what they charged.
With an unreliable revenue stream, many would have to cut costs by shedding staff or services.
"If this policy goes ahead as it is, the quality of early childhood education in New Zealand is set to fall. Teachers will be laid off. Educational programmes will be cut."
Council president Margie Blackwood said the move was made with great reluctance and followed 18 months of pleading with the Government to change the policy.
The problems would be solved by allowing for compulsory top-up fees so parents could choose between centres with such fees and those without.
Education Minister Steve Maharey said he remained optimistic about take-up of the policy, which he had at first said would be available to 92,000 children - all 3- and 4-year-olds - by July 1.
"[Early childhood education] providers across the country are clearly very keen to offer 20 hours free and I'm optimistic of a good take-up as the policy rolls out this year."
More than 160,000 forms had already been ordered by centres wanting to sign up. Of the council's boycott calls, he said it was "an internal memo produced for its own members and I have no intention of getting involved in an internal debate within the [early childhood sector] ".
But National Party spokeswoman Paula Bennett said the memo would result in a mass rebellion. It was fraudulent for Mr Maharey to have promised parents they need only go to a centre and sign up when the reality was that many would be unable to access it.
"How many times does the minister need to hear that his policy is deeply flawed and will affect the quality of early childhood education in New Zealand? He knows he's got it wrong. It's time to admit it."
Under the policy, which will be offered at centres that accept it from July, the Government will pay between $4.09 and $10.60 a child an hour, depending on staffing.
The funding is based on the average cost of providing the basic service required under the law.
Centres cannot treat the money as a subsidy by charging top-up fees, or penalise parents who do not pay extra optional charges.
Major providers, including Barnardos and KidiCorp, have already decided to offer it, although Barnardos said it would have to cover a shortfall itself.
The Auckland Kindergarten Association, which last month urged its 107 kindergartens to lobby Mr Maharey to change the policy, said it had not yet decided if it would adopt it.
Mrs Blackwood said relying on "optional charges" and "donations" left centres with an unreliable revenue stream. The Government had refused to budge on any of the concerns the Early Childhood Council had.
She could not introduce the policy in her two centres without substantially raising fees for other children, or shedding staff and reducing the staff-child ratio, "and I'm not willing to do that after 20 years in this area".
In a survey by the council last month, one quarter of its members said they would take up the policy. Thirty per cent - predominantly in cities - rejected it and the others were undecided.
But three-quarters of centres had answered "no" to the question of whether the free funding would cover the costs of providing the policy.
