Why Ideas Matter: The Hidden Theory Shaping Early Childhood Education

27 July 2026

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By Kathy Wolfe, Chief Executive, Te Rito Maioha Early Childhood New Zealand

When people think about early childhood education policy, they often picture funding rates, teacher-child ratios, qualification requirements or regulations.

But behind every policy decision sits something much more powerful. An idea.

Ideas shape priorities, priorities shape investment and investment shapes the experiences of more than 200,000 tamariki attending early childhood education every day. That is why one of the most important conversations currently taking place in New Zealand isn’t about funding formulas at all. It is about how we define early childhood education itself.

Is early childhood education primarily a private benefit for whānau? A service that enables parents to participate in the workforce? Or is it something much bigger – a public good that benefits every New Zealander?

At first glance this might sound like an academic debate, but it isn’t.

History shows that economic theories have profound real-world consequences. Keynesian economics reshaped how governments respond to recessions. Free-market theory fundamentally altered the role of government during the 1980s. Behavioural economics changed everything from retirement savings to public health policy. The same is true for early childhood education.

If government begins with the assumption that ECE is principally a merit good - a service whose benefits largely accrue to the child and family using it, then the logical policy focus becomes participation, affordability, consumer choice and market competition.

Economists may continue to debate whether early childhood education is best described as a merit good or a public good. That distinction has value within economic theory. But for public policy, the more important question is whether our funding system recognises the full value that quality early childhood education creates. If its benefits extend well beyond the individual child and their whānau, and the evidence consistently shows they do, supporting working whānau is an important outcome, but when workforce participation becomes the primary policy objective, policy settings risk losing sight of those broader public benefits.

But if government begins with the understanding that ECE is a public good - one that strengthens communities, improves educational outcomes, reduces future public costs and contributes to a more cohesive society, then quality becomes the central policy question. That isn’t simply an economic theory. It reflects what quality early childhood educators see every day.

Parents often describe the impact in ways that statistics never can. One mother recently reflected that her son had learned far more than letters and numbers. He had become more independent, learned to regulate his emotions, showed empathy towards others and took pride in helping younger tamariki. She wrote that while her son was leaving for primary school, “we will hold its teachings in our lives always.” That is what quality early childhood education looks like through a parent’s eyes, not simply preparing children for school, but helping shape the people they become.

Gillian Somers, Principal of New Plymouth Montessori School, doesn’t hesitate when asked who benefits from quality early childhood education.

“Society,” she says.

A merit good asks, “Who benefits?” A public good asks, “Who benefits beyond the immediate user?” Early childhood education passes that second test with remarkable consistency.

“Our role is to grow wonderful human beings. If we do our job right, children leave with a strong sense of belonging, resilience, independence, critical thinking and a deep connection to their community. They don’t just benefit from their community – they understand they have a role to play in strengthening it.”

This is where the distinction between a merit good and a public good becomes visible. If ECE is viewed primarily as a merit good, quality becomes something to be balanced against cost. The policy conversation naturally focuses on affordability, participation and how services can be delivered more efficiently. But if ECE is understood as a public good, quality is no longer simply another line item in the budget. It becomes the mechanism through which public benefit is created.

Viewed through that lens, qualified kaiako become essential rather than optional. Better teacher-child ratios become the foundation for meaningful relationships, rather than another expense to be managed. Professional learning, effective leadership and rich learning environments are not “nice to have” additions, they are the means by which society receives the return on its investment. Long-term outcomes become more important than short-term participation figures.

As we argued in our earlier State of the Sector article, Quality versus Affordability: Why framing Early Childhood Education as “quality” versus “affordability” is a mistake, quality and affordability should not be viewed as competing objectives. Quality is the mechanism through which early childhood education delivers the educational, social and economic benefits that justify public investment in the first place.

That distinction between merit good and a public good matters, because the decisions currently being made about funding, regulation and workforce policy will determine the shape of New Zealand’s early childhood system for decades to come.

The Government’s ECE Funding Review presents an opportunity to build a system fit for the future. Yet the review has been constrained from the outset by operating within an existing funding envelope. While the MAG’s Terms of Reference include consideration of quality factors such as teacher-child ratios¹, any significant improvement must be achieved without additional investment, creating difficult trade-offs between quality, affordability and sustainability.

At the same time, the Government amended the statutory purpose of ECE to add a new objective: supporting parents’ and caregivers’ participation in the labour market. Supporting working whānau is an important outcome of high-quality early childhood education. However, when workforce participation becomes the primary policy objective, rather than the result of investing in quality, priorities inevitably begin to shift.

High participation matters. Every child should be able to access quality early childhood education regardless of their family’s circumstances. But participation without quality cannot deliver the educational, social and economic benefits that justify public investment in the first place. Access and quality are not competing goals; they are mutually reinforcing. As we explored in our earlier State of the Sector article, Quality versus Affordability, presenting these as competing objectives creates a false choice. The real challenge is designing a funding system that delivers both.

The danger is subtle. As we explored in an earlier State of the Sector article examining developments in Australia, policy settings that gradually shift the focus away from educational quality can reshape an entire early childhood system over time. It rarely happens through one dramatic decision. Rather, it occurs through a series of seemingly modest policy choices that gradually redefine the purpose of early childhood education. Instead of asking, “What do tamariki need to thrive?” we begin asking, “What is the least expensive way to maximise participation?” Those are not the same questions.

Somers believes a quality early childhood service doesn’t simply care for tamariki – it intentionally builds their capability. She says one of the biggest surprises for parents comes when they stop and observe what their tamariki are doing in a quality learning environment.

“Parents are often amazed,” she says. “At home they might still be putting on their child’s gumboots or helping them with everyday tasks. Then they come into the centre and watch that same child sewing a button onto a jacket, baking muffins from scratch, helping a younger child complete a puzzle, or independently solving a problem they thought their child couldn’t manage.”

For Somers, these moments are not accidents, they are the result of skilled teaching. “Quality isn’t about constantly doing more for tamariki,” she explains. “It’s about knowing when not to. A trained teacher knows when to intervene, when to stand back, and when to provide the space and time a child needs to explore, discover and solve problems for themselves.”

That professional judgement transforms early childhood education from a place where tamariki are simply supervised into an environment where they develop confidence, independence and the resilience to tackle new challenges. In other words, quality isn’t simply a benefit enjoyed by one child or one family. It helps develop capable, resilient citizens whose contribution extends well beyond the early childhood centre. That is precisely what economists mean when they describe something as a public good.

What is incredibly frustrating in the funding debate is that the evidence consistently tells us that quality matters.

Research demonstrates that qualified kaiako, effective leadership, professional learning and appropriate teacher-child ratios work together to create the conditions in which tamariki flourish. These structural features influence the quality of relationships, teaching and learning that tamariki experience every day. They are not independent variables that can simply be traded off against one another.

Somers says this is where professional judgement makes all the difference.

“A trained teacher uses their understanding of child development to influence every decision they make,” she says. Observation is not passive; it allows kaiako to recognise what a child needs, understand where they are developmentally and intentionally shape the environment to support them.

Importantly, New Zealand’s own research shows that services with fully qualified teaching teams consistently provide higher-quality learning environments and richer interactions for tamariki than services with lower qualification levels². Quality is not an optional extra. It is the mechanism through which positive outcomes are achieved and something Te Rito Maioha discusses in the paper, Qualified Teachers in Early Childhood Education: Laying the foundations for lifelong learning and success.

Sometimes those outcomes are visible in the smallest moments. Somers recalls watching a child who had often struggled to regulate big emotions comfort another child who was upset. “It’s okay,” the child said. “They’re just feeling a bit sad. We’ll give them some space and help them breathe.”

Somers explained the child was repeating the calm guidance kaiako had provided countless times before. “Now the child was taking that time to see it in someone else,” Somers says. “It was just so heartwarming to see.”

Those moments matter because they reveal something much bigger than academic achievement. They demonstrate empathy, resilience and social capability - qualities that strengthen whānau, workplaces and communities long after tamariki leave early childhood education. Qualities that also prepare a child for the next steps in their education.

Our national curriculum, Te Whāriki, reminds us that learning is about far more than narrow measures of cognitive development. It is about belonging (mana whenua), wellbeing (mana atua), contribution (mana tangata), communication (mana reo), exploration (mana aotūroa) and identity, outcomes that are difficult to reduce to economic measures but are fundamental to who we want our tamariki to become.

Those aspirations are difficult to reconcile with a narrow view of ECE as a service whose primary purpose is enabling workforce participation. They make far more sense if ECE is understood as an investment in the kind of society we want to create.

Sometimes the impact of quality isn’t visible until years later. Somers remembers three Year 13 students returning to visit the centre, simply because they wanted to reconnect with the place that had shaped them.

“For these big, strapping 17 or 18-year-old boys to come back and say hello to their teachers, that tells you something. Tamariki might not remember everything they did here, but it becomes part of who they are and the people they become.”

International thinking is also moving in this direction. UNESCO’s Reimagining our Futures Together argues that education should be strengthened as a public endeavour and common good, recognising that its benefits extend across society and generations rather than being confined to individual learners.³ UNESCO’s language of education as a “common good” is not simply philosophical. It reflects the understanding that education creates benefits which markets alone cannot fully value or capture. That is why governments invest in it.

That perspective should resonate strongly in Aotearoa New Zealand. High-quality early childhood education contributes to healthier tamariki, stronger whānau, greater educational success and more resilient communities. It also supports higher workforce participation and generates long-term economic and social returns through reduced demand on health, welfare and justice systems.⁴ These benefits accrue not only to the child attending ECE today, but to all of us.

The evidence is overwhelming that quality early childhood education creates educational, social and economic benefits that compound across generations and strengthen society as a whole.⁵

Perhaps the real question, then, is not whether ECE fits neatly into an economist’s definition of a public good or a merit good.

The real question is this:

What kind of country do we want to build and what is the best way of getting there?

Perhaps Somers captures the answer best. “If you want to change society,” she says, “the only way you can change society for the better is by working with young people from the ground up. These children are going to become our doctors, our bosses and our future leaders.”

When asked what she hopes every child leaves her centre with, something no report card could ever measure, her answer isn’t literacy or numeracy. “A strong sense of themselves. A love of learning. Good social skills. Critical thinking. Being comfortable with diversity.”

Those are not simply outcomes for one child or one family. They are the foundations of the kind of society we all want to live in.

• If we believe every child deserves access to high-quality early learning…

• If we believe strong communities create a stronger economy…

• If we believe investing early is wiser than paying later…

Every government must make trade-offs. The real question is not whether trade-offs exist, but what outcomes they are designed to achieve. If our goal is to build healthier, more capable and more resilient communities, then investment decisions should begin with what tamariki need to thrive, not simply what costs the least today.

Then early childhood education must be treated as more than simply a service purchased by individual whānau. It is an investment in our collective future because its benefits extend well beyond the tamariki enrolled today. That is the defining characteristic of a public good. And once we understand that, the question is no longer whether we can afford to invest in quality, it is whether we can afford not to.

The decisions we make today will determine not only the future of early childhood education, but the future of Aotearoa itself.

Media Contact

Rob McCann - Lead Communications Advisor | Kaitohutohu Whakapā Matua
022 411 4560
rob.mccann@ecnz.ac.nz

Notes:

• The 2024 Regulatory Review of Early Childhood Education, commissioned by the Ministry for Regulation before the Ministerial Advisory Group (MAG) was established, adopts the economic framing of early childhood education as a merit good, drawing on the Oxford Reference definition of the term.

• MAG member Sarah Hogan asks, “Is early childhood education a public good? And does it matter?” Her paper outlines the economic distinction between public goods and merit goods and concludes that early childhood education is best understood as a merit good.

• The review has been constrained from the outset by operating within an existing funding envelope. While the Terms of Reference include consideration of quality factors such as teacher-child ratios, any significant improvement must be achieved without additional investment, creating difficult trade-offs between quality, affordability and sustainability.

• A criticism of the MAG is that it contains relatively strong representation from commercial providers, funding specialists and provider organisations, while comparatively fewer members have backgrounds primarily in child development, pedagogy or independent educational research.

• Ratios: In response to Te Rito Maioha and Childspace’s petition for a 1:4 ratio for children under three, the Early Childhood Council (ECC) told the Parliamentary Petitions Committee that its members already operate with better adult-to-child ratios than the regulatory minimum. Rather than lowering the minimum ratios, it supported publicly reporting actual operating ratios so parents could make more informed choices about quality. The submission was signed by ECC Chief Executive Simon Laube, who is now a member of the MAG.