There are concerns experienced early childhood teachers may be priced out of some jobs as pay parity funding is not meeting all centres' needs.  

The Early Childhood Council believes the opt-in system, which sets pay rate steps for educators based on qualification, service, and experience, may also be resulting in some centres raising fees and closing altogether.  

The Ministry of Education has recognised the funding may not meet the increased teacher salary costs at every service and is carrying out a funding review.  

According to the Ministry, under the current funding system, early learning subsidies are based on average costs for all education and care services, and are not tailored to the costs of each individual service. A service’s funding increases as the number of hours that children attend increases, within certain limits.

“The Ministry of Education has increased their funding rate to help pay for pay parity, but the increase to their funding rate and what the centre actually has to pay teachers are two quite different things,” Early Childhood Council (ECC) CEO Simon Laube said.  

The ECC helped centres calculate if they could afford to opt-in to pay parity, and while many couldn’t, they opted in out of fear of losing their best teachers, Laube said.  

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He said some centres opted to close, knowing they couldn’t make it work, while others are increasing fees to cover the shortfall in funding when opting in. Other centres that employ more than the minimum number of required teachers may have to look at downsizing.  

“There is a very large number of centres that actually pride themselves on not charging fees. Those ones are in big trouble because where are they going to get the kind of revenue you need to plug that gap? Those ones are at risk of closure and downsizing to a point they can make it work,” Laube said.  

For centres that have opted-in, there is concern that as staff’s pay increases, the Government funding will not meet the cost.  

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The ECC is concerned that may already be having an impact and centres could be selecting teachers that are less qualified, knowing they will be able to afford them.  

The issue isn’t black and white – it is different if all of a centre’s teachers have 10 years' experience, rather than varying levels of experience, Laube said.  

The ECC wants the Ministry to fund early childhood centres for the cost of the teachers and their pay parity rates.  

Ministry of Education, Group Manager, Policy, John Brooker said the Government is committed to moving teachers in education and care services toward pay parity with their counterparts in kindergartens.  

But this will take multiple budgets, which is how pay parity funding has progressed. Over the past three budgets $587 million has been allocated to improving teacher pay in education and care services, he said.  

“We recognise that pay parity funding may not meet the increased teacher salary costs at each service, due to different levels of teacher experience. This is why the parity funding rates and extended parity funding rates are offered as an ‘opt-in’ and are not compulsory.”

The Ministry is carrying out a pay parity funding review to better align government funding with the associated costs for individual services and there will be opportunities for sector feedback as it progresses.