Supporting early learning now is one of the most powerful investments our country can make – CE sector open letter

Early learning centres warn funding gaps put thousands of tamariki at risk. Photo / Alyssa Smith

THE FACTS

• Data indicates 443 early childhood services closed between March 2022 and July 2025.
• The Family Boost policy’s low uptake left $104 million unused.

Early Childhood Education in Aotearoa New Zealand has always been a partnership between Government and New Zealand families.

The sector was set up this way to ensure every child has access to crucial foundational education.

But today, more than 190,000 New Zealand children are at risk of losing access to quality early learning with services across the country under serious pressure because of ever-increasing operating costs, pay parity increases, and just a 0.5% funding adjustment from the 2025 budget.

Analysis undertaken by the ECE Sector Partnership across 500 providers last year indicates an average yearly financial shortfall of $41,000, with some facing deficits four times that.

Data indicates 443 early childhood services closed between March 2022 and July 2025, however, the Partnership analysis estimates up to 400 centres could be forced in just one year up to June 2026.

For many Early Childhood Education (ECE) organisations, especially those serving low-income and rural communities, government subsidies make up as much as 90% of their income. Others rely on donations from generous New Zealanders to provide fee exemptions to families living on limited or no income.

Raising fees is simply not an affordable option in many areas, but even if this step is taken, the analysis indicates fee increases would likely only cover 21% of the shortfall.

The Government’s Family Boost policy was intended to help families, but most simply can’t afford to pay upfront and claim a rebate later.

Information released under the Official Information Act indicates uptake has been so low that in the first year, $104m earmarked for Family Boost has been left untouched. Despite the change in thresholds, October saw just 55,000 claims against the Inland Revenue Department’s expectation of 92,000.

This significant underspend signals the policy isn’t working, despite the best intentions. In reality, the most effective way to keep fees down and ensure the doors stay open is to adequately fund services directly.

If ECE remains under pressure, the impacts would be wide-reaching.

Parents could be forced out of work because of a lack of early learning options, while business productivity would be undermined through staff losses. Both would have a negative ripple effect on local economies and communities.

Ultimately though, this comes down to our tamariki.

The first 2000 days matter more than any election cycle – they shape the rest of a child’s life. Around 80% of a child’s brain develops during this time, laying the foundations for emotional regulation, learning, relationships, and wellbeing. These early years are when children build the skills that help them arrive at school ready to learn, ready to connect, and ready to thrive.

Supporting early learning now is one of the most powerful investments our country can make in its future.

As the coalition Government embarks on its Budget 2026 planning process, we appeal to them to ensure adequate and realistic funding allocations for ECE, and with immediate flow-through to centres after budget day in May.

There has been an 11% gap between government funding increases and inflationary effects since 2019. It is realistic and financially prudent for this government to increase Budget 2026 by 5% for ECE to ensure service viability and balance cost pressures with parents.

With the right support, early learning services can continue doing what they do best: giving every child, no matter where they live or what their family circumstances – the stronger possible start. We stand ready to work with the Government to make this happen.

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