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ECE costs increasing

Written By: - Date published: 12:01 pm, April 21st, 2011 - 19 comments
Categories: cost of living, education, national - Tags: , ,

The Nats’ attack on early childhood education (ECE) is starting to bite. As surely as night follows day, the cuts in funding for childcare centres are showing up as increased costs for parents.

This graph is based on CPI data from Statistics NZ. The y-axis takes June 2006 as a baseline unit cost of 1000. By the end of 2008 this unit cost had fallen to about 680, the effect of Labour’s popular 20 hours free policy.  Now thanks to National costs have increased sharply — and the trend shows no sign of levelling off.

On top of the rapidly increasing prices of food, petrol, and other expenses, the increasing cost of ECE is a blow that singles out  young families.  This just isn’t right. Here’s what National promised at the last election:

We will keep 20 Hours and maintain existing subsidies and fee controls. Thousands of parents are now using the scheme and we do not want to cause them financial uncertainty.

That promise wasn’t worth the paper it was printed on.

19 comments on “ECE costs increasing ”

  1. Colonial Viper 1

    Not sure how National’s ECE cuts are leading to increased costs “for patents” 🙂

    • r0b 1.1

      Everyone’s a spelling cop!  Fixed – ta…

      • Draco T Bastard 1.1.1

        YEah, but with ACTA, TPPA, etc, increased costs for patents will probably also apply. I’m sure you’ll find that someone somewhere has a patent on childcare.

  2. lprent 2

    Good post. Nice to see a graph – I’m starting to reactivate my OpenOffice spreadsheet skills now that Marty isn’t posting…

  3. ASA 3

    ECE promise worth exactly the same as ‘we won’t raise GST” – a typical barefaced lie. While Labour’s targeting of Key in 2008 (don’t trust John Key) was probably a strategic error, their prediction has turned out to be extremely accurate.

  4. hobbit 4

    blah blah blah I want you to pay for my kids..

    • Colonial Viper 4.1

      blah blah blah I want you to pay for the roads I drive on
      the hospitals I use
      the education my workmates receive
      Oh yeah, its called living together in a mutually supportive society

  5. 12% rise in costs in a year.
    Anne Tolley and John Key apparently don’t see a connection between their cuts to funding and rising costs to parents.
    Out of Touch.

  6. PeteG 6

    If resources are limited does it make sense to move funding from tertiary to ECE? A good start is going to do more good than options to finish off with.
    Just throwing more money at ECE is most likley to benefit two working parent families the most ie families with higher incomes.
    One drawback with ECE is that it’s not compulsory. Those kids that need the most help and attention are probably the least likely to be put in ECE.

    • Colonial Viper 6.1

      The majority of the points you made are bollocks.

      Just throwing more money at ECE is most likley to benefit two working parent families the most ie families with higher incomes.

      Higher than what? Many of these families are still bloody struggling on your so-called “higher incomes” (otherwise they wouldnt be working two jobs).

      If resources are limited does it make sense to move funding from tertiary to ECE? A good start is going to do more good than options to finish off with.

      Your last sentence contradicts your first sentence. **Sigh**

      One drawback with ECE is that it’s not compulsory. Those kids that need the most help and attention are probably the least likely to be put in ECE.

      That seems likely to be true, actually.

      • rosy 6.1.1

        Participation rates are increasing in all ethnic groups:

        Prior-participation rates have grown most strongly for Pasifika children, rising from 74.9 percent in 2000 to 85.3 percent in 2010. The next strongest growth was for Asian children (from 89.5 percent to 96.7 percent), followed by Maori children (82.9 percent to 89.4 percent) and European children (94.5 percent to 98.1 percent). Pasifika children also had the strongest growth in the more recent period, with their prior-participation rates rising 1.9 percentage points in the last two years, followed by Asian children (1.2 percentage points), Maori children (1.0 percentage points) and European children (0.6 percentage points).

        Poorer communities have lower participation rates, but the report does not show change over time. I suspect that poorer communities rates are increasing given the increase in Pasifika and Maori rates (based on their over-representation in poorer communities).

    • Think outside the square (i.e., just education), PeteG.

      If we accept, for now, the idea that “resources are limited” to their present levels, how about moving funding from roading to ECE?

      • PeteG 6.2.1

        Fair point.
        But why snot other squares What about moving funding from policing and justice to ECE? Social Welfare to ECE? Health to ECE? Ok, it might take a bit of upfront investment, but addressing early childhood comprehensively will reduce the need for spending in other agencies later.
        I’m surprised National have been so quiet on the pre-fives, I know they’ve been looking at “early” ideas, Gluckman has been openly aware. Maybe it will all be revealed later in the year, otherwise on this it will have been a major fail.

        • Bright Red

          PeteG, stopping deflecting. let’s just start by agreeing that moving funding from highway projects that have benefit/cost ratios below 1 – ie they cost more than they’re worth – to ECE, which has a BCR of 8, is sensible.

  7. dave` 7

    <p><p><i>the effect of Labour’s popular 20 hours free policy</i></p>
    <p>Except that was a lie too as it wasn’t free. And it wasnt very popular was we had to pay for it.</p></p>

    • Draco T Bastard 7.1

      No, the 20 hours free wasn’t free but with the cost spread across everyone then spent onto a centralised childcare system the extra productivity that is done by parents now going to work produces a greater return to the whole country.
      BTW, the 20 hours free was massively popular – that’s why NACT had to promise not to cut it to be elected.

  8. Gramsci 8

    I will say it again.  The real reason that the government cannot control ECE costs is that there are too many privately run ECE centers in “the market” that are skimming any government subsidy off as profit and simply raising the fees.

    My daughter goes to a not-for-profit center and they have committed to hold their fees until June 2012.  Yes they are well supported by their parents but all money goes into the running of the center; not profits for the owner.  It is a great ECE centre, not a baby minding factory.

    Government needs to buy out a chain like the could have in 2009(?) with ABC Childcare and put in place a good CEA covering the teachers.  This would skew “the ECE market” by raising the standards and drive a number of the for-profits out of business (which could then be bought up as well).   

    Wouldn’t work?  Anyone remember what happened with bank fees when Kiwi Bank entered the retail banking market?  Same principle applies – the government uses its dominance to set “the market” at a high level, not the current race to the bottom to maintain profits.

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