A Dark Future Ahead For ECE

The Early Childhood Education (ECE) sector faces dark days ahead, with Budget 2025 funding lagging behind inflation and a two-year freeze on Pay Parity. ECE provision, teachers’ pay and qualifications are being undermined, the Pay Equity claim has ceased, and a sector-wide survey revealed strong dissatisfaction and concerns over viability and rising parent fees.

“The sad reality is the government are demonstrating that they do not value ECE or that they do not believe the decades of evidence that attributes ‘high-quality ECE’ to better outcomes for children,” says Kathy Wolfe, Chief Executive of Te Rito Maioha.

Yesterday the government announced sweeping changes to how new ECE teachers are paid, scrapping the need for employers to take into account qualifications, ECE teaching experience and other relevant experience.

“The new rules,” says Mrs Wolfe, “give ECE centres the option of ignoring the qualifications or experience when employing a new teacher. An employer now can employ a new teacher on step one, the entry level salary for degree qualified teachers, regardless of whether they have multiple degrees and/or, regardless of their ECE work experience, or other relevant work experience. We sincerely hope that this will not happen and that employers will continue to value qualifications and experience. However without adequate funding, they will not have any options.”

“This government appears to be saying that experience and education no longer matter, that quality early childhood education can be sacrificed in the name of government cost-cutting. But what we know is that parents want the best for their children, not a system that drives passionate, qualified teachers out of the profession."

“The announcement to freeze Pay Parity for two years is also a further sign that the government’s aim is to reduce their future investment commitments. This is purely a fiscal decision for the government. Employers now cannot opt into funded higher parity options to value their teaching staff. Unfortunately, it also stops New Zealand’s move towards a fully qualified ECE sector and erodes our place as a world leader in ECE.

“It’s clear to us that the recent changes were rushed and implemented without proper consultation, while the lack of investment in the Budget is the result of the government limiting its expenditure in ECE investment. We’re heading back towards a system where quality education and what matters for our children are not the driving motivators behind government decisions. This is incredibly frustrating and sad, especially when you consider the significant return in future social costs when we get the right focus on investment in quality outcomes for children,” says Mrs Wolfe.

A recent survey of the ECE sector revealed that over 68% of providers expect to raise fees, while 27% remain undecided. Only 5% said they do not anticipate a fee increase.

“Centres are telling us that the lack of funding in the budget will force them to raise fees, and reducing costs puts the quality of early childhood education at serious risk because the reduction will mostly be in staffing. Centres may end up reducing teacher-to-child ratios, cutting staff hours, hiring fewer qualified teachers, postponing repairs, shrinking food portions, or stepping away from Pay Parity all together where they are able. It’s an absolute travesty, says Mrs Wolfe.”

Toni Christie, Director of Childspace Early Childhood Institute and owner/operator of ECE centres, agrees, “between the Pay Equity changes, the Regulations Review, and now this pay parity change create a picture which devalue qualifications and work experience for new teachers all happening at once, it’s easy to see why the ECE sector feels under attack. Rather than focusing the Regulations Review on improving the safety and the wellbeing of tamariki, the main message seems to be a willingness to lower teacher qualification standards. Instead of investing in the profession and training more kaiako, the government is undermining the right of our predominantly female workforce to be fairly paid.”

“For over 40 years, consistent policy efforts have aimed to ensure that early childhood education is treated on par with the rest of the education system, including the goal of 100% qualified teachers. Now, the government appears to be signalling that high-quality ECE is not part of their strategy, using reviews and funding mechanisms to deliberately lower standards in the sector. This is a conscious policy choice and it is all being pushed through and announced without consultation or warning.”

“The deliberate freezing of providers being able to opt into higher levels of Pay Parity as they build up a more qualified workforce for two years, this reinforces the message that, ‘quality and qualifications do not count’.

“No one wants to remove the education from early childhood education. That might be a cheaper option, but it fails to recognise the significant and critical developmental growth that occurs during these early years. Specialist knowledge and expertise that requires a qualified workforce is essential to meet the complex needs of our youngest tamariki.

The changes being made under urgency and without consultation will have dire consequences for Aotearoa and our Tamariki, especially when we have the Minister of Education focusing on improving children’s learning – it all begins in ECE!” says Mrs Christie.

“The big fear with all these policy decisions,” says Mrs Wolfe, “is that the implications are real and severe. The funding shortfall and pay parity changes will result in record centre closures; decreased child participation in ECE; negative impacts on child learning, development and wellbeing; an increase in teacher shortages and a reduction in workforce participation by parents and caregivers.”

“In Budget 2024, ECE services absorbed most of the increased teacher salaries and rising operational costs due to inflation, with limited ability to pass these costs on to parents through fee increases. Centres did this in good faith, believing the government to follow through with timely and meaningful measures to address the resulting funding shortfall in the next budget.”

“Budget 2025 failed to honour this good faith approach and the widening gap between rising inflation-driven costs and inadequate government investment has now become unsustainable.”

“While an ECE funding review has been approved, it is going to take two years to see any benefit, so we urge the Associate Minister for Education to urgently provide interim investment or another form of financial relief until the review is complete. Without this, the sector faces the risk of systemic collapse. We remain committed to working with the government, but it's essential that the majority of voices within the sector are genuinely heard.”

“With around 194,597 tamariki, 33,309 teaching staff (qualified and unqualified) and 4,409 service providers[1] in ECE being affected by these sweeping changes, the government's move to focus on the commercial aspects of ECE as opposed to supporting quality ECE that then leads to better outcomes for our youngest people in school, paints a dark picture for our tamariki, says Mrs Wolfe.”

Notes:

• The ECE sector has experienced a multi-year funding freeze prior to 2017 under National leaving the sector approximately 11% behind CPI over the last 10 to 15 years.
• The survey ran from 26/05/25 with 60 responses from kaiako, managers and owners and is accurate at time of release.

Teacher Salaries affected by new rules

• To value experience and qualifications, New Zealand had a system that worked out ECE teacher’s salaries in an 11-step system. ‘Recognised Service’ acknowledges your work experience with each year in ECE counting as a step.”
• If you were moving from a job outside of ECE, ‘Previous Relevant Experience’ recognised what was termed relevant experience as half a step, up to a maximum of two steps. A teacher’s qualifications were also relevant, and determined what step on the salary scale a teacher began at.
• Employers may now choose what step a teacher starts on when they begin a new job. It will be entirely discretionary as to whether an employer counts previous relevant experience, previous ECE experience, or qualifications.
• relevant experience as half a step, up to a maximum of two steps. A teacher’s qualifications were also relevant, and determined what step on the salary scale a teacher began at.
• Employers may now choose what step a teacher starts on when they begin a new job. It will be entirely discretionary as to whether an employer counts previous relevant experience, previous ECE experience, or qualifications.
• The rules do not change the pay rates of existing employee contracts.
• The Funding Handbook published by the MoE is third-tier legislation and is issued under section 548(5) of the Education and Training Act 2020. The new rules form part of the Handbook.
• There has been no consultation with the sector on these changes.

Pay Parity and Teacher Salaries affected by two year Pay Parity freeze for two years from 9 June

• Under Pay Parity, to move up a step, a teacher needs to work 2,080 hours, which is the equivalent of one year of full-time employment.
• If you’re a part-time teacher, you only move up once you hit the next 2,080 hours (which will be more than a year).
• How much funding a provider receives from the government is based on the age of the children and how many hours they are enrolled for, and the percentage of ECE qualified teachers a centre has.
• Centres choose which parity category they want to be on; this impacts their funding and the salary steps they need to pay.
• At each funding round (3 per year), ECE providers can move up from e.g. ‘extended’ to ‘full pay parity’. From the 9 June the government have frozen the ability to change the opt in level for two years.
• Parties to the ECECA Collective Agreement would still need to count previous experience and higher qualifications when employing new teachers.

1 January 2025 rates 80-99% Qualified Teachers (Funding rates per enrolled child per hour, max 6 hrs per day)

1 January 2025 rates 100% Qualified Teachers (Funding rates per enrolled child per hour, max 6 hrs per day)

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