ECE and the Recession
The experience of New Zealand
July 16
ECE in New Zealand
Situation:
• 300% increase in spending
since 2004/05: up $700
million
• Another $200 million
increase by 2014
ECE Spending ($NZ, millions)
Actual ($M) Forecast ($M)
1600
1400
1200
1000
800
600
400
200
20
12
/13
20
13
/14
20
10
/11
20
11
/12
20
08
/09
20
09
/10
20
06
/07
20
07
/08
0
20
04
/05
20
05
/06
Reasons:
• Policy to increase teacher
numbers and fund more of
the cost
• High birth rates
• Children start earlier
• Children attend more hours
per week
But… no significant change to overall
participation levels
The recession in New Zealand
Impacts:
• Unemployment doubled
• Finance stopped
• Increasing government
spending a problem
• 2009 forecast: debt to increase
to 60% of GDP in 2020, 220%
by 2050
Response:
• Jobs and growth
• Lift long-term economic
performance: tax, jobs,
investment
• Control public spending, debt
ECE and economic growth: evidence
ECE can have impressive economic payoffs:
“Early skills breed later skills because early learning begets later
learning… investment in the young is warranted” –
Heckman and Masterov, 2007.
But…
•It takes decades to get
the gains
•The short-term payoffs
from ECE are smaller
•All ECE costs are
incurred up front
Impacts for ECE
Government is spending more on ECE in 2010/11 than it planned to in
2009, and more than it has ever spent on ECE before
Budget 2009:
Budget 2010:
• Extended 20 Hours ECE
• New targeted participation
initiatives
• Inflation adjustment
• Inflation adjustment
• Reduced professional
development funding
• Removed extra funding to centres
with 80-100% qualified staff
• Deferred funding for adult: child
ratio change
• Eased teacher supply: focussed
grants, easier for more teachers to
work in ECE
Government has kept funding extra ECE provision and more costly
provision – but will no longer make automatic funding increases
Questions?