Advice to Minister Seymour and to the Ministry of Education that the data does not show that pay parity is forcing more centres to close
14 August 2025
Hon David Seymour
Minister for Regulation and Associate Minister of Education
D.Seymour@ministers.govt.nz
Copy to:
Hon Erica Stanford, Minister for Education
John Brooker, Ministry of Education General Manager Early Learning & System Policy
Dear Minister Seymour,
I am writing to you to express concern about claims made to you by others in the ECE sector purporting that the introduction of the pay parity scheme has led to an increase in ECE centre closures – and to request that you take action to prevent the further spread of this false narrative.
A recent Ministry briefing to your office (METIS No: 1341617. Report: Options to reduce ECE service staffing costs) referenced these claims, made by the Early Childhood Council (see p. 2).
The Office of Early Childhood Education was surprised by these claims – they did not match what we were seeing in the sector. So we decided to fact check these claims by conducting our own analysis.
We’ve found that the claims appear to be untrue. There is simply no evidence that the pay parity scheme has caused centres to close.
The ECC appears to have used data from the Ministry of Education’s ECE directory and salary attestation figures to track how many care and education centres have closed since pay parity was introduced in 2022. But these data sets do not include any information about why these centres have closed – despite it being very possible (in our view likely) that many of these centres have shut for reasons that have nothing to do with pay parity.
The ECC has therefore wrongly equated a correlation with a causation. Just because there has been an uptick in centre closures since 2022 when pay parity was introduced, it does not mean that two things are related.
At the OECE we did a much more thorough analysis of centre closures, using data provided to us by the Ministry of Education which included the reasons stated for each service’s closure since 2022.
We found that just 21 care and education services have closed for financial reasons over the last three years (six in 2022, seven in 2023 and eight last year). This is a far smaller figure than what is purported by the ECC.
The ECC has repeated its misleading claims in a recent media story (Nelson Mail, 4 Aug 2025, “Two Track Fears Over ECE).
Its chief executive Simon Laube is quoted as saying “about 214 small centres had closed since the pay parity started”.
It’s not clear in the story where this figure has come from (the journalist does not appear to have independently fact checked this number). However, it is clear that the ECC has yet again, not provided any context as to why these centres have closed.
While it’s true that most of the centres that closed for financial reasons between 2022 and 2024 were small (which we’ve defined as those with capacity for 50 or fewer children), notably four of them were part of the same “group” (service provider) and one was part of the large corporate Kindercare chain. This means that just 16 small, independent centres closed for financial reasons in the last three years. This is hardly a number to write home about – it’s far smaller than the figures purported by the ECC. We also don’t even know if the financial problems these centres were having had anything to do with pay parity.
We, at the OECE, believe that the myth that pay parity is forcing more care and education centres to close is harmful to the sector and is misleading the public.
Now you know, politically it is in your interest to refrain from referencing this claim in any further speeches/media releases you make on pay parity and publicly correct the record on this topic. We will be asking the Ministry of Education (to whom we’ve also sent a copy of this letter) to do the same.
We know that the Government’s intention is to “move away” from pay parity. Although we disagree with this decision, we respect the Government’s right to make policy decisions.
However, we do request that the Government, in its communication with the public, be frank about the true reason for its plans to discontinue pay parity funding – the Government intends to make fiscal savings by axing it – and refrain from referencing further false claims such as this one from the ECC.
I am happy to meet with you anytime, to discuss this and any other ECE issues you may like to know more about.
Yours sincerely,
Dr Sarah Alexander
