Kindergartens received a 0.48% operational subsidy increase in Budget 2026, while other early childhood education services received 1.5%.
The Government said kindergartens received a lower increase because they received additional funding for staffing costs under the kindergarten teachers' collective agreement.
Kindergartens New Zealand chief executive Jill Bond said the increase would not meet rising costs. "It's a drop in the bucket because costs are significantly greater than 0.45 percent," Bond said.
Kindergartens spend about 88% of their funding on teacher salaries, with Ministry of Education funding covering on average a high 70% of teacher salary costs.
Most Kindergartens New Zealand member associations charge no or notional fees. Bond said kindergartens will have to ask for family donations of goods like kitchen supplies and art supplies to continue operating without charging fees.
Bond said kindergartens will have to cut costs including long-term maintenance of assets, and that ongoing underfunding will erode kindergartens' cash reserves and hamper their ability to do new and innovative things.