Parents of children in early childhood education will be out of pocket despite Prime Minister John Key's assurance that no-one will be "worse off" after receiving tax cuts.
The Government is being accused of breaking an election promise and parents fear extra fees will prevent some from sending young children to childcare.
One Porirua childcare centre has already warned parents they face $50 a week more in fees after the Government axed the top subsidy for the 20 hours early childhood education scheme in its annual Budget.
And centres around the country are doing their sums, with the New Zealand Educational Institute (NZEI) warning that the shortfall will be passed on to parents, with some facing up to $60 extra a week.
But Education Minister Anne Tolley said those numbers were "speculation" and many centres were likely to decide against fee increases. Mr Key said tax cuts, announced in the May 20 Budget, meant middle- and low-income earners would not be worse off, even after a 2.5 per cent GST increase.
Childcare centres with more than 80 per cent qualified teachers will have their subsidy cut from $12.45 an hour to $10.88, per child. About half the country's early childhood operators will be affected.
Porirua First Five Childcare Centre treasurer David Codwell said there was no choice but to increase fees for care over the free 20 hours scheme, meaning fees for a fulltime child could increase by $50.
Parents had been "shocked" but understanding when they found out, he said. The parent-run centre had been very affordable, but that would change for many.
"We run it as cheap as we can."
Kirsty McKay, 36, of Wellington, is an early childhood teacher. Her daughter Emiliana Gonzalez-McKay, 3, attends about 25 hours a week at the Victoria University creche.
Parents were in a holding pattern waiting to hear what costs would be passed on, she said.
"A lot of low-income families and single-parent families aren't going to be able to afford to keep their children in early childhood education."
If her daughter was still attending fulltime it would have been untenable for her, she said.
Mrs Tolley said cutting the top subsidy would encourage educators with more qualified staff to cut back to the 80 per cent level, freeing teachers to move to schools with a lower percentage of qualified staff. "As long as they are maintaining 80 per cent they are meeting our requirements."
Fees were the responsibility of centres, not the Government, she said.
NZEI vice-president Judith Nowotarski said quality of education would be undermined. "Centres may be forced to replace qualified staff with unqualified staff."
Labour's early childhood spokeswoman Sue Moroney said teachers were not pieces to be moved around, but people with ties to certain locations who were unlikely to move to fit the Government's plan. The Government had broken its election promise, and the change negated the tax cut for many families.
"It actually has them on the losing side of the balance sheet."
Mrs Tolley said the Government had kept the promise, because access to the free hours remained unchanged.
- The Dominion Post