David Seymour responds to our concerns about pay parity myth
OPINION – 3 October 2025
Associate education minister David Seymour has responded to concerns from the Office of Early Childhood Education about claims circulating in the sector that the pay parity scheme is causing more education and care centres to close.
In August, we fact checked claims by some ECE business lobbyists that the initiative was “directly contributing to the decline in service numbers”. We analysed data on openings and closures of services from 2022 to 2024 and found no evidence this was happening.
We also looked at what else was happening at the time such as the Covid pandemic (vaccination requirements for most businesses weren’t removed until 4/4/2022). We noted the rise in qualified teachers – in 2021, 65.5% of staff at these services were qualified teachers, compared to 67% in 2024. In 2025 more than 90% of eligible centres have opted-in to some form of pay parity.
Despite this, in a Cabinet paper from April, the Ministry of Education wrote to Seymour that “Sector representatives such as the Early Childhood Council have indicated that pay parity arrangements are creating funding shortfalls for centres, increasing rates of closure”.
Worried about how this myth was being perpetuated, the OECE wrote to Seymour and the Ministry to let them know about our findings.
This week, Seymour sent us a reply.
He said he had been advised by the Ministry “that caution should be applied when attributing reasons for closure beyond the level indicated. The data on closures is self-reported and the categories available are broad and do not attribute any closures directly to the pay parity scheme. Furthermore, I understand that there are many cases where no reason is provided. These are typically recorded as voluntary closures and add additional uncertainty to closure data, as it is possible they may still fit into existing categories”.
However, he was “unable to fully discount feedback I have received from the sector that the pay parity scheme is creating funding shortfalls and financial strain for some ECE services. This is consistent with the Ministry’s advice that the pay parity funding mechanism is not always able to adequately match funding for teacher pay to the salary costs faced by services”.
Seymour added that the ECE funding review would provide advice about the Government’s role in ECE teacher pay moving forward.
“I trust this reassures you that I am considering the full range of perspectives and that the ECE Funding Review provides the opportunity to examine these matters carefully,” he wrote.
The Ministry of Education is yet to respond to the OECE’s letter.
Although the OECE is pleased that the minister has acknowledged our letter, we would’ve liked for him to take our concerns more seriously and commit to investigating further whether this is actually happening and ask lobbyists to provide evidence if it is.
Our letter to Minister Seymour
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 or any other ECE issues you may like to know more about.
Yours sincerely,
Dr Sarah Alexander
