Financing for equity in pre-primary education

1. Education resources to subnational governments

3. Education resources to students and families

4. Social policies and family support programmes

Introduction

Key financing indicators (UIS Data)

The official entry age to pre-primary education is 3 years old. In 2023, the net enrolment rate for pre-primary (both sexes) was 16%.

Governance

The Department of Education is responsible for the governance of preschool for 6-year-olds in Papua New Guinea. Pre-primary education covers ages 4-6 (K1 and K2), with preschool (preparation for primary) covering 6-year-olds, while primary education starts at age 7. Pre-primary education for 4-5-year-olds is outside the formal education system and not supported by the Department of Education. The management of the sector is split between the Department of Education (preparatory grade) and the Department of Community Development and Religion (programmes for children below the age of 6).

Early childhood education for children below the age of 6 is the responsibility of the Department of Community Development and Religion (DCDR). However, the Department of Education has taken the steps to develop an ECE Policy and to also take on this education component. It has specifically supported the DCDR in the areas of teacher education, curriculum development and developing a policy document to govern the establishment of early childhood centres.

While early childhood education (ages 4-6) is not officially part of the formal education system, the 2020-29 National Education Plan aims to gradually make it the responsibility of the Department of Education. Districts and churches are partners of the government in delivering pre-primary education services.

The three levels of education administration are national (Department of Education), provincial (Provincial Education Boards) and district administration. At the central level, the Department of Education oversees and regulates the education system, with the delivery of education services being the responsibility of provincial and district administrations. Local-level governments and district development authorities are specifically responsible for pre-primary and primary education.

Tuition-free status

Fees are paid by the government for preschool (preparatory grade at age 6 before primary). Almost all other pre-primary education centres charge fees, with fees depending on the provider.

1. Education resources to subnational governments

Provincial and Local-Level Government Funding

Provinces and local-level governments are funded for key service activities, including education, through fiscal transfers from the national government and provincial own-source revenue. Since 2009, intergovernmental fiscal transfers have been primarily formula-based, aiming to address disparities between provinces and ensure equitable resource allocation, in line with the 2009 Intergovernmental Relations (Functions and Funding) Act. Provincial disparities mainly reflect fiscal imbalances, including differences in tax revenue and government spending needs, which arise from factors such as land mass, population density, and remoteness.

The National Economic & Fiscal Commission (NEFC), operating under the Ministry of Rural and Economic Development since 2023, determines grants for provincial and local-level governments each year based on a legislated formula and cost estimates.

Three main types of grants are provided to provinces: the staffing grant, development/capital funding, and recurrent funding (function and administration grants), the latter of which includes additional function grants, such as education service delivery grants, for provinces with lower fiscal capacity.

As part of recurrent funding, provinces and local-level governments receive an ‘equalisation amount’, representing a minimum funding level for all provinces, determined annually based on net national revenues. Provinces also receive an ‘individual province share’ on a needs basis. The formulas used are as follows:

Fiscal Needs Amount: Estimated recurrent cost of assigned service delivery functions and responsibilities − Assessed revenue = Fiscal needs amount

Individual Local-Level Government (LLG) Share:

Urban LLGs: Equalisation amount for urban local-level governments × (Fiscal needs amount of individual urban LLG ÷ Total fiscal needs amount of urban LLGs) = Individual urban LLG share

Rural LLGs: The rural LLG share is further divided based on district costs and population. Funding for individual rural LLGs is determined according to assessed fiscal needs.

Allocation to Local-Level Governments

Individual local-level government (LLG) shares are divided into urban LLGs (21%) and rural LLGs (79%). Individual urban LLG shares are calculated as: equalisation amount for urban LLGs × (fiscal needs amount of individual urban LLG ÷ total fiscal needs amount of urban LLGs). Rural LLG shares are further allocated based on district costs and population. For urban LLGs, funding is determined according to their assessed fiscal needs.

2. Education resources to institutions

Government Tuition Fee Subsidies for Preparatory Grade

Since 2012, all schools have received grants to cover 13 years of tuition fees for students in preschool (preparatory grade), primary schools, secondary schools, national schools of excellence, vocational schools, inclusive education resource centres, flexible open and distance education services, and permitted schools, under the Government Tuition Fee Subsidy Programme (GTFS). In 2022, the grants were expanded to cover school project costs as part of the Family Assistance Package, providing additional support to families facing economic hardship. While allocations were originally based on student enrolment numbers, since 2025, the policy has shifted to base allocations on geographical locality.

The National Education Board has set school fee limits for 2025 using the Unit Cost study conducted in 2024 and the National Economic and Fiscal Commission (NEFC) PNG Access Remote Index (PARI) categories: 1) Highly Accessible (HA); 2) Accessible (A); 3) Moderately Accessible (MA); 4) Remote; 5) Very Remote (VRE); and 6) Extremely Remote (ER). Maximum grants per child in 2025 are determined according to the NEFC model, each school’s enrolment, and total funds available, as outlined in the Ministry of Education’s Ministerial Policy Statement 01/2025.

There are no government subsidies for 4-5-year-old children. The National Education Council (NEC) Decision No 232/2020 on Early Childhood Education and 2020-29 National Education Plan noted the importance of early childhood development and approved districts and churches to partner in the delivery of the early childhood education sector. NEC also approved pre-school to be financed under a Public Private Church Community Partnership.

Member schools established by recognized Education Agencies (including at the preschool level) receive grants-in-aid by the state to assist them in carrying out their education functions, which include the provision of staff, buildings, education equipment, and funds for teacher salaries. Moreover, as of 2020, all state-owned companies pay 10% of their profits to church agency schools that are established as part of the Church-State Partnership Program on an annual basis. While permitted schools used to receive grants from the state, these schools are no longer supported by the Government Tuition Fee Subsidy Policy which continues to support member schools from elementary to secondary education level through tuition-fee subsidies.