30 April 2025

Sufficiently fund ECE services

Provide sufficient funding for ECE services to deliver quality education for tamariki and ensure kaiako are paid what they are worth as a profession, without placing the burden of high fees on parents.

It is well documented that early childhood education (ECE) sets children | tamariki up for success, in terms of their own social, emotional, and cognitive development, their lifelong learning journey, and the wellbeing of their family | whānau. Despite this, the ECE sector has long been underfunded, and ECE teachers | kaiako remain undervalued.

It is critical that our ECE sector is sufficiently funded for our tamariki to benefit from quality education, ECE kaiako to be paid fairly, and whānau to access affordable options.

A shift in mindset is required, to stop thinking about ECE as a cost, but as an investment. Investing in our tamariki is investing in Aotearoa New Zealand’s future. We need a commitment to sustained investment in ECE to achieve the ultimate goal of a viable and effective ECE sector that delivers positive educational and social outcomes for our future generations.

Why fund ECE?

A sufficiently funded ECE sector would:

• enable services to be viable, as funding reflects the real cost of delivery.

• mean services can invest in their learning environments, resources, and professional development for kaiako.

• adequately resource services, with low teacher: child ratios and learning support.

• mean qualified kaiako are fairly remunerated at parity with primary, recognising the real work they undertake and valuing the profession.

• go a long way to addressing the current workforce shortages, as better pay and conditions will help attract new kaiako into ECE and retain existing kaiako.

• ensure whānau are not burdened by high fees.

• allow whānau choices about the type of ECE service their child | tamaiti attends, considering their own needs, values, and priorities.

• demonstrate a commitment to ECE and recognise its value.

These factors contribute to a stable ECE sector, affordable choices for whānau, improved working conditions for kaiako, and ultimately, a quality ECE experience for tamariki. All aspects of the ECE sector are uplifted. Unfortunately, this is not our current reality, where after years of significant underfunding from successive governments, ECE funding has not kept up with inflation, or the increasing costs of running a service.

What is the cost of underfunding ECE?

ECE services are struggling to operate

The current ECE operating environment is financially unsustainable. Since 2019, there has been a 5% decrease in the number of licensed ECE services, dropping from 4,652 to 4,409 in 20241. This is an alarming trend.

Underfunding puts significant pressure on the sector, as it does not meet the actual cost of delivery. Rising costs - including rent, compliance, and resources - have not being matched by funding increases, forcing many services to either close, reduce offerings, or pass additional costs onto whānau. This limits a services’ ability to deliver safe, high-quality education and care without increasing the parent fees. Funding should enable a diverse range of services to operate and be financially viable.

ECE kaiako are underpaid and undervalued

Underfunding ECE means kaiako are not fairly paid for the work they do. ECE kaiako are required to be qualified, registered, and certificated to undertake complex, and incredibly important work. Yet, despite these professional requirements, they are consistently undervalued and inadequately remunerated. These are two significant factors contributing to workforce stress and shortages. COVID-19 further exacerbated staffing shortages, with kaiako facing growing financial strain, wellbeing issues, and burnout, leading many to leave the profession altogether.

Aotearoa has teaching workforce shortages across all education sectors, but the pay and conditions of ECE kaiako set it behind primary and secondary teaching in both public perception and in real dollars. Unlike their compulsory sector counterparts, ECE kaiako are not paid by the Ministry of Education, they are employed and paid by individual ECE services. Pay parity would help with attracting new kaiako to the profession, improving retention of qualified kaiako, and supporting a stable and better quality ECE sector for tamariki.

We are committed to qualified and certificated ECE teachers to achieve pay parity with the primary sector. However, in practice, pay parity has been poorly implemented and under-funded. It is an opt-in scheme, and has not been fully funded, leaving services to make up the shortfall meaning parents are impacted by higher fees, and ECE relief teachers are no longer eligible. This undermines the quality, mana and professional status of teachers, and will drive down pay and conditions and the quality of early learning. Full government funding is essential to achieve full pay parity for ECE kaiako with primary kaiako

Qualified kaiako are central to quality ECE - along with group size and ratios, kaiako qualifications form part of the ‘iron triangle’ of quality ECE. We must invest in and value this highly professional workforce. You can read more about the importance of qualified teachers here

Whānau are paying the price. Tamariki are paying the price…

ECE in Aotearoa is amongst the most expensive in the developed world for whānau. Various initiatives by various governments have helped affordability for some age groups, or for some families, but none have gone far enough to keep fees down.

Facing increased costs, many ECE services pass these on to whānau. This reduces affordability and access, creating a barrier and limiting their options. We advocate for parents to have a genuine choice in the type of ECE service their tamariki attend. This choice should include kindergartens, education and care with both community and private services, Montessori, Steiner, Barnardos, kōhanga reo, home-based services, playcentres, and Pacific language nests. Being able to choose what is the right environment for tamariki, enriches the sector and reflects the varied needs and values of whānau.

The consequences of underfunding are clear: underfunding is driving inequality, disrupting access to quality ECE, and results in lost potential for tamariki and their whānau. The environment is also unstable and unsustainable for ECE kaiako and services.

ECE is an investment

Aotearoa’s newly established Social Investment Agency intends to better use data, evidence, and analytics to identify effective early interventions, and to partner with social service providers to improve long-term outcomes - ultimately reducing future costs to taxpayers.

We believe ECE aligns strongly with this model. Investing early in a child’s education supports equity and has long-term health, education, and employment benefits for tamariki and their whānau (ECE enables parents to enter the workforce, breaking cycles of poverty and growing the economy, decreasing reliance on social services, and less engagement with justice agencies). Economic analyses show that ECE delivers a high return on investment, with the long-term benefits of public funding far outweighing the initial costs. The return on investment is social, economic, and intergenerational. When viewed through this lens, ECE is not a ‘nice to have’, it is a smart and future-focused investment in Aotearoa’s wellbeing and prosperity.

Quality ECE is the crucial first step to setting tamariki up for academic success. Investing in ECE needs to be an essential component of the government’s ongoing investment, not just in education, but in our wider social wellbeing.

We need action and investment

We need bold action and sustained investment to build the ECE system that tamariki, whānau, and Aotearoa deserve. A well-funded ECE sector - where kaiako are paid fairly, where quality is consistently high, and parents have affordable choices - is essential for delivering equitable outcomes across all communities.

Sufficient, sustained funding is critical to ensuring all tamariki can access quality ECE, no matter where they live or their family circumstances. It also means investment that supports sector sustainability and recognises the professionalism and value of the ECE teaching workforce.

The sector urgently needs significant investment to get back on track. This isn’t about short-term fixes - it’s about building a stronger, fairer future. We urge the Government to act now: to properly fund the sector, to commit to long-term solutions, and to work across party lines to deliver lasting change.

Funding alone, however, is not enough. Investment must be informed by, and support a strategic teaching workforce plan, and the regulatory review to create the strong, sustainable foundation our ECE system needs.

Check out our other deep dives here

Media Contact

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