MESSAGE CEO's Times are difficult for ECE providers. I would say times are harder now than they were in 2022 where providers thought things were bad and they were over-wrought by COVID-19 funding challenges and constant new regulations. Following the change of government in 2023, there was a brief period of calm. But the previous Labour Government’s regulation changes continued to flow-through even after that change of government (up until about mid 2024). Since Associate Minister Seymour became responsible minister for ECE, the inexplicable new regulations and proclamations from the Ministry of Education have mostly stopped. We had a period of relative stability without the constant distraction of the Ministry of Education. Lack of distractions were welcome and people in ECE could be more focused on the things that motivate them – delivering great services to children and families everyday and looking after their staff. A challenging new period has started since Budget Day on 22 May. There has been a new major disruption from the Ministry of Education. A “Pay Parity funding moratorium” has been imposed. Basically the moratorium freezes where providers are at in terms of the three current Pay Parity funding policies. The freeze runs from 1 July 2025 until 30 June 2027. Before the moratorium started, ECC saw a huge flurry of activity from our members and other providers. They had to run their numbers under urgency and make their best punts about which Pay Parity setting they would choose before the two-year moratorium took effect – locking them out of higher options. I think a very large number of providers will have shifted into the top scheme now – Full Parity – driven by the fear of missing out on it. The pay parity policies don’t work properly and they certainly do not give our teachers parity with kindergarten teachers. The policy allows two services with radically different teacher salary costs to get funded at the same rate. For a service with very low salary costs they get windfall gains, but for providers with the most experienced teachers they get penalised and must fill their shortfall in funding by charging parents higher fees. The ECE Funding Review will need to create solutions to these problems. I’m no longer confident that providers will be able to survive long enough to see solutions realised. Over the course of now until May next year there is too much financial pressure. New analysis we have done shows that, since the Pay Parity policies started, only 74% of small centres (less than 20 child places) could make Pay Parity work. 20% of small centres have had to close and 6% remain outside the pay parity scheme. Smaller centres tend to be operated by independent providers. In contrast, for larger centres (76-100 child place centres) 97% remain open and were in Pay Parity. It is even higher for centres with 101-150 places – with 99% remaining open and in Pay Parity. These larger centres are the most likely profile of centres to be in Full Parity (as opposed to the lower options of Parity and Extended Parity). Things are even worse for those centres with less than 20 children, as they are the much less likely to be able to offer Full Parity at all. This means if you’re teaching in a small centre, you are more likely to You wouldn’t have read a print-issue of Swings & Roundabouts for a while. We only do one hard-copy run per year and for the rest of the year we do a monthly digital newsletter. Having a more regular Swings enables us to stay better up to date with new developments. See the QR code to sign up to our digital version. July 2025 { 6 }
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