Swings + Roundabouts Winter 2021

RATES ANALYSIS $/FCH incl GST Rates from 1 Jan 2021 Rates from 1 July 2021 Rates from 1 Jan 2022 with 1.2% Opt-in rates from 1 Jan 2022 U2 O2 20hrs U2 O2 20hrs U2 O2 20hrs U2 O2 20hrs 100% $13.60 $7.97 $13.01 $13.62 $7.98 $13.03 $13.78 $8.08 $13.19 $14.13 $8.29 $13.52 80-99% $13.02 $7.20 $12.28 $13.04 $7.21 $12.30 $13.20 $7.30 $12.45 $13.54 $7.49 $12.77 50-79% $11.79 $6.22 $11.19 $11.81 $6.23 $11.21 $11.95 $6.30 $11.34 $12.25 $6.46 $11.63 The current average funding gap at 80% is $1.32. The post-January 2022 average funding gap at 80% is $1.35. The funding gap between kindergartens and centres is the same or marginally bigger! The gap may differ based on the mix of hours and/or mix of teachers. SO, IN SUMMARY: FCH Rate (80% Band) As at 1 Jan 2021 As at 1 Jan 2022 All Day Teacher Led Centre Based $12.28 $12.77 (KTC 6 Step) All Day & Sessional Kindergartens $13.78 $14.31 $ Gap $1.50 $1.54 % Gap 12.2% 12.1% WHEN, WHAT AND HOW? Effective 1 July 2021 the Education and Care rate increases by $0.02 cents. Attestation increases from $49,862 ($23.97/hr) to $51,358 ($24.69/hr) (↑ $0.72). Effective 1 January 2022 a 1.2% increase on all subsidy rates occurs (including Targeted Funding). Also effective 1 January 2022 higher Pay Parity rates. Opt-in to KTCA 6 step scale: KTCA Step Salary @ 12/07/21 Per Hour KTCA Step Salary @ 12/07/21 Per Hour 1 $51,358 $24.69 7 $70,040 $33.67 2 $53,544 $25.74 8 $75,190 $36.15 3 $55,948 $26.90 9 $79,413 $38.18 4 $58,133 $27.95 10 $85,490 $41.10 5 $61,794 $29.71 11 $90,000 $43.27 6 $65,776 $31.62 WHERE DOES MY CENTRE STAND? The ECC has constructed a spreadsheet for centres to work through to determine if the various increases are sustainable or lead to a loss for the centre. This spreadsheet is available from the ECC’s website shop. SOME THINGS TO THINK ABOUT Director Duties under the Companies Act include the duty to avoid carrying on the business of the company in a manner likely to create a substantial risk of serious loss to the company’s creditors; and to avoid incurring obligations unless satisfied that the company will be able to honour them when required to do so. Similar responsibilities exist for charities and incorporated societies. The KTCA expires July 2022 – so what are the new rates you will then have to attest to? And will you get any additional funding to do so? If the Education and Training (Grants – Budget Measures) Amendment Bill passes and remains as it was at the time of writing this article – what other conditions after 1 January 2022 could be introduced? The KTCA rates are Total Remuneration (e.g. they include any Kiwisaver contribution). But what about the impact of other increased staffing costs – 10 Days sick leave, Matariki Public Holiday… WHAT DO WE RECOMMEND YOU DO? Do your sums The effect of the funding rate increases will look different to some centres based on their mix of staff and the level of those staff (ie: which step they might be on from 1 January 2022). Tell your MPs Tell your local MPs about the impact the state of ECE funding is having on your centre, your staff, your children and their families – both opposition and government MPs. Tell your parents The message they have been receiving is that the wonderful government is investing over $170 million in ECE! The reality is quite different. June 2021 { 13 }