The federal government will continue to subsidise 15 hours of preschool for four-year-olds for another year, Assistant Education Minister Sussan Ley has announced.
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About 10 hours are funded by the Victorian government and five hours by the Commonwealth.
But the agreement was to expire at the end of this year raising fears that kinder programs would be slashed, fees would increase and teachers would lose their jobs.
Ms Ley said on Friday that the Abbott government would commit $406 million to ensure Australian families can continue to access up to 15 hours of preschool per week in 2015.
The Municipal Association of Victoria had warned that without continued federal funding the families of 73,000 Victorian preschoolers will face untenable fee increases of up to 129 per cent.
An extra 1200 teachers had been employed in Victoria to deliver the 15 hours of preschool a week since the agreement to boost hours from 10 to 15 was signed in 2008.
Ms Ley said Friday's announcement was "first and foremost" about giving parents and preschools certainty for the 2015 calendar year.
She said the Abbott government was also improving access to preschool by ensuring the new national partnership arrangements made funding available to all types of accredited preschool programs – regardless of whether they were delivered through schools, stand alone preschools or long-day-care centres.
The national partnership arrangements provide funding to support the provision of preschool for up to 15 hours per week for families.
However, Ms Ley said currently state and territory governments have discretion over what type of preschool programs they fund, meaning some service types, such as preschools in long day care centres, may miss out in certain jurisdictions.
"These new rules mean a fairer go for all preschools and families and ensure funding is distributed equitably, which is particularly important in disadvantaged and regional areas," Ms Ley said.
She said extending the national partnership for 12 months was a "common-sense" approach, given the Productivity Commission Inquiry into Child Care and Early Learning was not due to hand its report to the federal government until late October.
But nothing had been decided on funding after 2015.
"The future is very much subject to our response to the productivity commission inquiry. This is a once in a generation chance to introduce new policy," Ms Ley said.
Deloitte was also commissioned to report on the effectiveness of the funding program.
She said the report broadly indicates that the universal access targets were not achieved.
"However, great progress was made," she said.
The report is currently with state governments and will be made public shortly, she said.
Victorian Minister for Early Childhood Development Wendy Lovell said the decision showed Ms Ley had listened to the states and territories.
"Today's announcement comes after several months of sustained and productive discussions between the Napthine government and the federal government," Ms Lovell said.
Australian Education Union Victorian president Meredith Peace said she welcomed the announcement but was disappointed the funding had only been extended for another 12 months.
"It is not good enough to have to have a political argument every 12 months about whether we do or don't fund 15 hours of early childhood education," Ms Peace said.
"There is too much compelling research that shows children who start school with early childhood education start well ahead of other students.
"Our politicians have to set aside politics and fund the program properly for the long term."
with Steve Lillebuen
