The government is freezing its funding for early childhood education (ECE), meaning those in well off areas may end up paying more for their children.
The government spends $1.3 billion on ECE subsidies and the amount has normally increased with inflation, but that inflation adjustment has been cut in Thursday's budget.
"In the current fiscal climate, we have to weigh up costs and benefits," Education Minister Hekia Parata said.
"Better-targeted funding this year will help the government achieve its goal of providing support to those with the greatest need."
The government still backed the 20 hours a week subsidy, which research showed more than met the average cost of high-quality ECE, she said.
Instead, more money - $111m - will be spent over the next four years trying to get more vulnerable children involved in ECE.
The money will be spent on low participation areas, targeting solo parents and on Maori immersion units.
Childcare centres and kindergartens set their own fee levels on top of any subsidies, but the freeze means they may have to increase their fees to absorb increasing costs.
Early Childhood Council chief executive Peter Reynolds praised the targeting of at-risk children, but says the funding freeze is "a cut by stealth" and thousands of ordinary families will soon be paying more for ECE.
In less well-off areas centres would be forced to reduce the quality of education and care, he said.
Many centres were struggling and the freeze would hurt both them and struggling parents.
However, the investment in at-risk children would have "life-changing consequences for large numbers of children" as they would start school prepared to learn.
"They will be more likely to do well at school and be employed, and less likely to be unemployed or in prison."
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