Public funding for early childhood education

IBISWorld forecasts public funding for early childhood education to rise by 1.7% in 2025-26, to reach $3.06 billion. Continued increases in child enrolments will fuel funding growth for Early Childhood Education (ECE) in 2025-26, raising the number of funded seats and strengthening the need for government assistance. The 2025 Budget makes a considerable investment in early learning, allocating $297.7 million to support the industry, including a subsidy increase and targeted assistance for providers experiencing financial challenges. Major projects include extending Early Intervention Services to Year 1, adding over 560 new expert staff, and reducing wait times for children who require further help. In addition, the Budget increases funding for oral language development which makes a cost-of-service adjustment for ECE providers, and continues work to enhance staff compensation.

Attendance at ECE in New Zealand is still voluntary, however it is accessible from infancy to school entry age. The Central Government (Te Kawanatanga o Aotearoa) continues to provide attendance subsidies, particularly through the ECE Funding, 20 Hours ECE, and Equity Funding programmes. The ECE Funding subsidy covers up to 30 hours of education and care per week for all children, with a daily maximum of six hours. The 20 Hours ECE programme offers a larger payment to children from two to five years old, covering up to 20 hours per week at six hours per day. Equity funding continues to focus on enhancing access for certain communities based on variables such as remoteness, socioeconomic status, and the proportion of children with special needs. As of September 2025, approximately 95.6% of children domestically continue to attend ECE (latest data available).

Over the last five years, funding for the Equity Funding Policy in Early Childhood Education (ECE) has increased drastically, leading to a large increase in overall public funding. This rise has been aided by slight increases in the population aged 14 and younger, which has expanded the pool of potential ECE students and increased the number of subsidised spaces. However, despite funding increases, the 2025 Budget expresses worry about cost adjustments falling behind inflation, putting strain on sector viability and potentially leading to higher fees for families. Overall, IBISWorld forecasts public funding for early childhood education to increase at a compound annual rate of 7.5% over the five years through 2025-26.