This paper describes the problematic aspects of redesigning the administration, organization, and funding of early childhood education in New Zealand. A committee for redesigning early childhood programs in the nation had specified the dimensions of the government's role in supporting early childhood education, and had proposed new arrangements for financial support and program administration. It was intended that the new design would replace all 26 existing funding formulas for grants from the government with one formula. Different services would be treated in the same way. Reaction to the plan was largely favorable, although there were some reservations and queries. In 1989, the government announced a new policy for early childhood care and education, one which differed from the redesign effort on several dimensions, including ownership issues, program monitoring responsibilities, hours of subsidized care, and coverage for special education services. These matters are discussed in detail in sections focusing on: (1) the context for the redesign effort; (2) recommendations of the redesign committee; (3) reaction to the recommendations for the new design; (4) the new policies announced by the government; (5) variation between the committee recommendations and government policy; and (6) public and private ownership issues. (RH)