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Early childhood teachers and managers say centres are struggling with teacher shortages, low enrolments and inadequate government funding.
Some are alarmed by surprise changes to pay parity - the system for giving centres higher subsidies if they pay qualified teachers the same as kindergarten and school teachers.
At Aro Valley Preschool in central Wellington senior teacher Bridget Mickelson-Warmouth said the government's half-a-percent funding increase for next year's subsidies and recent changes to pay parity were making people nervous.
"Funding is always a big key for community centres. Because we're not-for-profit, all the money that comes in goes back in to making sure that teachers are well-paid, that we're well-resourced, and that we can maintain low ratios and small groups," she said.
"It's quite unnerving to find out what's going to happen within our funding space."
Aro Valley Preschool senior teacher Bridget Mickelson-Warmouth says it's "unnerving" thinking about funding for the sector. Photo: RNZ / John Gerritsen
Mickelson-Warmouth said community-run centres were especially vulnerable to pay parity changes because they tended to hire experienced, qualified teachers who were paid at the top of the scale.
She said last year's decision to cut relief teachers from the scheme had already had a negative effect.
"We actually are finding it harder to get relievers as relief teachers either go into permanent work if they can find it or they can leave the sector altogether. We've had some fantastic relievers recently who are currently retraining in other areas and are going out of early childhood due to the inability to get work or the work that they can get is in places that they don't want to be," she said.
Some early childhood centre owners have complained that pay parity was hard to afford because the government funding that supported it was inadequate.
Despite that, the number of centres opting into the highest tier of the scheme - which obliged them to offer pay-parity rates to the most experienced staff - grew from about 1000 in 2023 to 1484 in March this year.
Auckland early childhood centre owner Vince Grgicevich said pay parity was tricky when it was introduced several years ago, but his biggest challenges were competition and parents keeping children home when they worked from home on Mondays and Fridays.
Grgicevich said centres tended to have fewer children attending on Mondays and Fridays, which saved parents money but made early childhood centre staffing difficult.
"Numbers have improved a little bit but they are still not back up to where we used to sit at 90-95 percent across the board. Our centres sit anywhere between 70 and 80 percent so we're okay, but a centre really needs to be relatively full to make good money," he said.
Grgicevich said many centres were not at 70 percent occupancy and those in areas where parents could not afford the fees were struggling.
"I know a lot of South Auckland centres really do struggle because you've got to charge a minimum of $300 for a baby and $200 for an over-three and a lot of parents can't even afford that," he said.
He said he recently sold a centre because there were too many other centres in the area.
Education Ministry figures showed children's participation in early learning increased last year after slumping in 2021-22.
Nearly 81 percent of four-year-olds were attending for 10 hours or more a week last year, up from 74 percent in 2023 but still shy of the pre-Covid high of 84 percent.
That translated into a percentage-point increase in occupancy to about 78 percent across the education and care sector but in Auckland it was 76 percent.
Meanwhile, Grgicevich said he was not expecting any relief from action stemming from last year's review of ECE regulations.
"That regulatory stuff, I personally think is a waste of time. We're inherently safe in what we do. There has to be some checks in place and they weren't costing us anything. My annual regulatory budget was low. If I spent two or three thousand dollars a year, that would be it," he said.
No chance to 'future-proof'
Kidsfirst Kindergartens is a non-profit organisation with about 64 kindergartens in Canterbury, the West Coast and Central Otago.
Its chief executive Sherryll Wilson said kindergarten teachers were state sector employees, so their pay parity with school teachers was negotiated directly with the government, unlike other early childhood teachers.
Even so, she said she was worried by the government's changes to pay parity and to early childhood regulations.
"It feels like for early childhood we are having the same challenges as what we've had years ago. The pay equity, pay parity, teacher supply. It feels like we never get to the stage where we can future-proof," she said.
"It feels like we're just going back in time and having the same arguments all over again."
Wilson said enrolments were good across the organisation's kindergartens but there were more centres competing for enrolments.
"In the past we might have had three or four really strong ECE services, not all kindergartens, but now we've got 10 services in the same area all trying to capture the same children," she said.
Wilson said one of the biggest challenges for the organisation was uncertainty about government funding from year to year was challenging.
"For a non-profit organisation like Kidsfirst, our greatest source of revenue is government funding, we're heavily reliant on it and we suffer from the whims of whoever is in power at any given time in terms of the funding we receive," she said.
Wilson said the supply of qualified teachers was a problem, especially in the regions, and there was a sense of exhaustion and frustration in the sector.
