Red Tape Reduction? Not for ECE: Full Details of the New Compliance Enforcement Regime for Services
NEWS/ANALYSIS – 29 June 2026
One of the most well‑known goals of ACT and National is to “cut red tape.” Associate Minister of Education David Seymour has repeatedly argued that reducing regulatory burden will lower costs for early childhood services.
But among the many regulatory changes introduced under the agenda of cutting red-tape, at least one goes in the opposite direction – the new graduated enforcement system for services that breach minimum standards which took effect on Monday 29 June 2026.
The groups and lobbyists who pushed for a lighter‑touch approach to regulation may be surprised to find that the new rules run to around 2,200 words, almost triple the length of the (red tape) regulation they replace. They also shift the cost of specialist support for meeting licensing requirements from taxpayers to ECE services, previously provided through SELO 1 funding. And when specialist help is required, the provider does not need to use an independent expert or a Ministry‑approved professional development provider, weakening safeguards around the quality and impartiality of that support (a case in 20220 shows why this matters – read the full story).
In practice, the new enforcement system slows intervention when services fall below minimum standards. With warnings and improvement plans now favoured over licence downgrades, service providers who breach the rules can continue operating with little or no consequence and often for much longer before any serious regulatory action is taken.
Because public reporting is discretionary for any service that avoids a provisional licence downgrade – which is now likely to be most – families may assume transparency that simply does not exist. Allowing the regulator to choose whether to publish information about non‑compliant services creates the appearance of openness, while in reality disclosure is unlikely, especially when the regulator is wary of protecting commercial interests and maintaining relationships with large corporate providers and their representatives who hold influential positions on advisory committees.
A stronger system would have moved enforcement in the opposite direction with regular unannounced spot checks, clearer penalties, and fines to deter non-compliance. Instead, thresholds are higher, steps are slower, and decisive action is less likely.
A brief outline of the political background
The Education (Early Childhood Services) Amendment Regulations 2026, which took effect on Monday 29 June 2026, introduce a new multi‑stage enforcement system for managing non‑compliance in early childhood education. The changes raise the thresholds for when a service’s licence can be downgraded, suspended, or cancelled, and require that one or more preliminary steps be taken before any regulatory action occurs.
These regulations were enabled by the Education and Training (Early Childhood Education Reform) Amendment Bill. Of the 107 submissions received, only six supported the Bill – including the Early Childhood Council (Simon Laube), Montessori Aotearoa (Cathy Wilson), NZ Kindergartens (Jill Bond) and Mike Bedford. Opponents included Mana Mokopuna Children’s Commissioner, Dunedin Kindergartens, OMEP Aotearoa, the Office of Early Childhood Education, Wendy Lee, the ECE Parents’ Council, Save the Children, Parents of Vision Impaired (NZ), and NZEI Te Riu Roa.
Complaints from dissatisfied providers were accepted at face value and used to justify the regulatory changes that now make it substantially harder for non‑compliance to result in a licence downgrade. [Falling apples and noisy trains – one side of fight against ECE red tape]
View the OECE’s submission on the Education (EC Services) Amendment Regulations
To understand the scale of the shift, it is useful to look at how the previous enforcement system compares with the new one.
How the New Graduated Enforcement Regime and Steps Differ From the Previous System
Individual service records of breaches
Previous practice
Breaches were routinely noted on a service’s file, whether or not formal enforcement action followed. Parents, complainants, researchers and anyone could access this information through an Official Information Act request, allowing a reasonably transparent picture of a service’s compliance history.
New Regulation 29A
A written record of non‑compliance will now be kept only when the Director considers it “warranted.” The term is undefined, leaving wide scope for interpretation. This creates room for providers to challenge or negotiate whether a breach is recorded at all.
Plan for achieving compliance
Previous practice
If a service demonstrated it could fix a breach by presenting a credible plan and showing it had the capacity to follow through, the regulator could pause formal enforcement. When a written direction or provisional licence was issued, services were expected to create a plan to meet the required conditions within a set timeframe or face stronger action.
New Regulation 29E
Services may now be required to prepare, implement, and complete an improvement plan. A draft must be submitted within fifteen working days, after which the Director may negotiate, approve, or impose the plan. Once approved, the service must implement it as directed. There is no maximum timeframe for completion, meaning an improvement plan could continue for many months or even indefinitely without triggering further enforcement
Specialist help
Previous practice
When a provider lacked the capability to address non‑compliance, the Ministry funded professional development support and received independent reports through its contracted provider.
New Regulation 29D
Services required to obtain specialist help must now pay for it themselves. The specialist does not need to be Ministry approved or independent. This allows providers to choose cheaper consultants, personal associates, or advisers with limited expertise, including those whose priority may be protecting the provider rather than the children.
Written directions
Previous Regulation 54
A written direction could be issued only when there was an immediate risk to health and safety that could be remedied while the service remained open. The timeframe was capped at 10 working days, and failure to comply could directly trigger a provisional licence or suspension.
New Regulation 29C
A written direction no longer requires an immediate risk. The timeframe remains capped at 10 working days, but if the service cannot operate safely, it is given 24 hours to fix the risk—while still operating. The direct pathway from a written direction to a provisional licence or suspension has been removed. Instead, a written direction becomes just one step in a cumulative enforcement ladder, reducing its immediate regulatory impact.
Written warning
Previous practice
There was no separate written‑warning stage. A written direction effectively served as the warning, and failure to comply could trigger a licence downgrade.
New Regulation 29B
A formal written warning is now a standalone enforcement tool. This allows the regulator to respond to non‑compliance without taking licensing action, but it also risks masking the seriousness of breaches by keeping them at a lower, less visible tier of enforcement.
Public notice of licence downgrade or cancellation
Previous practice
Licence cancellations were published in the Gazette, provisional licences had to be displayed publicly, suspensions were visible because the service closed and funding stopped, and written directions were available to anyone who asked.
New Regulation 29F
Mandatory public notice is now required when a licence is reclassified, suspended, or cancelled. The Director may also choose to publicly notify when a direction, specialist‑help requirement, or improvement plan has been imposed. Because this additional notification is discretionary, providers may contest it, and decisions may favour large private or corporate operators whose commercial interests the regulator may feel pressure to protect.
Public notification of investigation of complaint or incident
Previous regulation
Under the old system, nothing prevented the regulator from requiring services to inform parents when a serious complaint or incident occurred. If the Ministry wanted parents notified, it could simply make this a condition of licence. Transparency depended on regulatory judgement rather than regulatory limits.
New Regulation 59A
The new rule creates a formal process for public notification, but it is entirely discretionary. The Director may choose to notify the public when a complaint or incident warrants investigation, and may choose to require the service to inform parents. Any notice must include a summary of the matter while avoiding personal information unless disclosure is considered “necessary.”
Risk
This change gives the appearance of greater transparency without guaranteeing it. Because notification is optional, parents may actually be less likely to be informed than before. Discretionary decisions can be contested by providers, influenced by commercial or reputational considerations, or withheld entirely, particularly for large private or corporate operators. The requirement to avoid personal information also creates a loophole: if revealing an incident might indirectly identify a child, the regulator may decide not to notify at all. The result is a system that looks more open on paper while still allowing the regulator to keep families in the dark.
Higher threshold for a provisional licence
Previous Regulation 15(1)
Under the old rules, the Director could downgrade a licence whenever a service failed to comply with regulations or licence conditions, when a serious complaint or incident warranted investigation, or when a written direction was not complied with. The regulator had broad discretion to act early.
New Regulation 15(1)
The new framework significantly narrows when a licence can be downgraded. A downgrade may now occur only in two situations. First, a service may be downgraded after failing to comply with a single enforcement action such as a written direction, a specialist help requirement, or an improvement plan. This is the only remaining immediate downgrade route. Second, a downgrade may occur if the service breaches regulations and has accumulated two or more enforcement actions within the previous twelve months. These actions include a recorded non‑compliance, a formal warning, a written direction, a specialist help requirement, or an improvement plan. Only actions within that twelve‑month window count; older actions, even serious ones, effectively expire.
This cumulative pathway makes it far harder to downgrade services based on patterns of behaviour or multiple breaches that fall just outside the twelve‑month window. A service may have a long history of non‑compliance, yet none of it is considered unless it is recent.
Higher threshold for suspension
Previous Regulation 30(1)(a)
A licence could be suspended if it was not in children’s interests for the service to continue operating. This allowed the regulator to act quickly when a service was unsafe, unstable, or failing children, even when the danger was not immediate.
New Regulation 30(1)(a)
Suspension now requires both an immediate risk to children and a finding that continued operation is not in their interests. This substantially raises the threshold for suspension and restricts the regulator’s ability to intervene early, potentially preventing harm before it occurs.
What the new regulations mean for providers
The regulatory framework is now longer, more complex, and more administratively demanding, yet the enforcement consequences are weaker and easier for services to avoid.
It is an enforcement model that can be readily “gamed.” Providers may slow negotiations over improvement plans or specialist help, stretching timelines so enforcement actions do not accumulate within the required twelve‑month window. They may push for extended deadlines, reducing the chance of triggering further action. They benefit when the Director issues a warning instead of a direction, or decides a breach is not “warranted” for recording. And they can simply wait: once twelve months pass, earlier actions may no longer be considered toward a downgrade.
What this means for children and families
For children and families, the protections built into the enforcement system have become softer, slower, and easier for providers to sidestep. The cumulative effect is more red tape that prioritises keeping services operating over deterring non‑compliance.
Higher thresholds for downgrades and suspension, combined with the automatic expiry of enforcement actions after twelve months, significantly reduce the likelihood of timely intervention. This increases the risk that children remain in environments that do not meet minimum standards, because maintaining parent labour‑force participation has become an explicit policy goal of early childhood regulation.
Parents may also assume the new public‑notification rules guarantee they will be told when serious complaints or incidents occur. In reality, notification is entirely discretionary. The regulator can choose whether to inform families and can withhold information for reasons such as potential commercial harm to a provider.
The result is a system that keeps centres open but leaves families with even fewer assurances than before. Parents must rely more heavily on their own vigilance to identify risks the regulator may no longer disclose.
Side‑by‑Side Red Tape Comparison: The Previous and the New Regulations
Previous Regulation (15)(1)
The Director of Regulation may, by written notice to the service provider for a licensed service, reclassify a probationary licence or a full licence as a provisional licence, if satisfied that—
- (a) the early childhood service for which the licence was issued does not comply with these regulations; or
- (b) the early childhood service for which the licence was issued does not comply with all the conditions subject to which its licence was issued; or
- (c) a complaint has been lodged against the service provider alleging non-compliance with these regulations, and the Director of Regulation considers that the complaint warrants investigation; or
- (ca) an incident involving a child has occurred at the early childhood service for which the licence was issued, and the Director of Regulation considers that the incident warrants investigation; or
- (d) the service provider for a licensed early childhood service has not complied with a written direction from the Director of Regulation under these regulations (other than a written direction issued under regulation 54A) within a reasonable time; or
- (e) the service provider for a licensed early childhood service has not complied with a written direction from the Director of Regulation under regulation 54A within the time specified in that direction.
NEW Regulation (15)(1)
The Director of Regulation may, by written notice to a licensed service provider, reclassify the service provider’s probationary licence or full licence as a provisional licence, if satisfied that the service provider—
- (a) has failed to comply with 1 or more of the following:
- (i) a written direction to remedy a risk to health and safety given under regulation 29C:
- (ii) a requirement to employ or engage specialist help imposed under regulation 29D:
- (iii) a requirement to prepare, implement, and complete an improvement plan imposed under regulation 29E; or
b) has—
- (i) failed to comply with a requirement of these regulations or a condition of their licence; and
- (ii) been subject to 2 or more of the following within the previous 12 months:
- (A) a record of non-compliance kept under regulation 29A:
- (B) a formal warning issued under regulation 29B:
- (C) a written direction to remedy a risk to health and safety given under regulation 29C:
- (D) a requirement to employ or engage specialist help imposed under regulation 29D:
- (E) a requirement to prepare, implement, and complete an improvement plan imposed under regulation 29E.
Current regulation 15(3)
A written notice of reclassification may be given under subclause (1) at any time until the licence being reclassified has expired (including during any period while the licence remains in force after an application for renewing that licence has been made under regulation 37 (Reg 37 has been revoked).
New regulation 15(3)
A written notice of reclassification may be given under subclause (1) at any time until the licence being reclassified has expired.
Current regulation 16 (1 A)
(1A) If the Director of Regulation is satisfied that there has been any additional instance of a type described in regulation 15(1)(a) to (e) after reclassifying a probationary licence or a full licence as a provisional licence, the Director of Regulation—
- may, by written notice to the service provider, specify additional conditions that must be complied with for the revocation of the provisional licence and the return of the probationary licence or full licence, as the case may be; and
- must, in the notice, specify for each condition the date by which the condition must be complied with.
New regulation 16 (1 A)
(1A) If the Director of Regulation is satisfied that there has been an additional instance of a licensed service provider failing to comply with a requirement of these regulations or a condition of their licence after the Director has reclassified the service provider’s probationary licence or full licence as a provisional licence, the Director may forward to the service provider a revised provisional licence that—
- specifies additional conditions that must be complied with for the revocation of the provisional licence and the return of the probationary or full licence, as the case may be; and
- specifies for each condition the date by which the condition must be complied with.
(1B) A revised provisional licence forwarded to the licensed service provider under subclause (1A) replaces the previous provisional licence held by the service provider.
Current regulation 16(2A)
A date specified under subclause (1A)(b) will usually be a date not more than 3 months after the day on which the notice under subclause (1A)(a) was given to the service provider.
New regulation 16(2A)
A date specified under subclause (1A)(b) will usually be a date not more than 3 months after the day on which the revised provisional licence under subclause (1A) is forwarded to the licensed service provider.
Current regulation 30(1)(a) suspension of licences
(a) it is not in the interests of the children attending or participating in the service for the service to continue to operate;
New regulation 30(1)(a) – suspension of licences
- (a) both of the following apply:
- (i) an immediate risk to the health, safety, or well-being of children attending or participating in the service exists; and
- (ii) it is not in the interests of the children attending or participating in the service for the service to continue to operate; or
Current regulation 32(1)(e)(i)
has previously had a probationary or full licence reclassified as a provisional licence (unless the licence was reclassified on a ground listed in regulation 15(1)(c) or (ca) and the Director of Regulation was not in that case satisfied that non-compliance with these regulations had occurred); and
New regulation 32(1)(e)(i)
has previously had a probationary or full licence reclassified as a provisional licence; and
Remove regulation 54
54A Director of Regulation may direct service provider to remedy immediate health and safety risk
(1) The Director of Regulation may, in writing, direct the service provider of a licensed service to remedy any thing or activity that is an immediate risk to the health and safety of any person (an immediate health and safety risk) and that, in the opinion of the Director of Regulation,—
- (a) is, or is likely to be, a breach of these regulations; and
- (b) is capable of being remedied safely while the relevant early childhood service continues to operate.
(2) In directing the service provider of a licensed service to remedy an immediate health and safety risk, the Director of Regulation may impose any conditions that the Director of Regulation thinks fit relating to the risk and the continued operation of the service.
(3) The direction must include the date by which the service provider is to have remedied the immediate health and safety risk, which must be a date no later than 10 working days after the date of the direction.
(4) For the avoidance of doubt, a failure to comply with a written direction under this regulation may result in the reclassification of the service’s licence as a provisional licence under regulation 15 or the suspension of the service’s licence under regulation 30.
(5) This regulation does not limit the powers of the Director of Regulation to reclassify a licence as a provisional licence under regulation 15 or suspend a licence under regulation 30.
New regulation 39A – insert after regulation 39A(3)(f
(fa) extend, by not more than 3 months, the date for compliance with any requirement imposed under regulation 29B, 29C, 29D, or 29E:
New regulation 59A inserted
59A Public notification of investigation of complaint or incident
Discretionary public notification: investigation of complaint or incident
(1) Subclause (2) applies if the Director of Regulation decides to investigate a complaint against, or an incident involving, a licensed service provider in the following circumstances:
- (a) a complaint has been made against the service provider alleging non-compliance with a requirement of these regulations or a condition of their licence, and the Director considers that the complaint warrants investigation:
- (b) an incident involving a child has occurred at the premises of the service provider, and the Director considers that the incident warrants investigation.
(2) The Director of Regulation may give public notification of the investigation.
Requirements relating to public notification
(3) Public notification given under subclause (2) must contain a summary of the incident or complaint being investigated.
(4) The Director must ensure that the public notification does not contain personal information (within the meaning of section 7(1) of the Privacy Act 2020), unless the Director considers that publicly notifying the information is necessary to achieve the purposes of these regulations.
Requirement to inform parents or caregivers of investigation into complaint or incident
(5) The Director of Regulation may, instead of, or in addition to, giving notice under subclause (2), require the licensed service provider to inform parents or caregivers of children attending the service that an investigation into a complaint or an incident (as the case may be) is being carried out by the Director or the licensed service provider, or both.
New regulations 29A to 29F
29ARecord of non-compliance
(1) The Director of Regulation may take action under this regulation in relation to a licence held by a licensed service provider if satisfied that—
- (a) the service provider has not complied with a requirement of these regulations or a condition of their licence; and
- (b) the non-compliance has been subsequently rectified by the service provider; and
- (c) keeping a record of the non-compliance is warranted in the circumstances.
(2) The Director may keep a written record of the non-compliance.
(3) The record must contain a brief description of—
- (a) the non-compliance; and
- (b) the action taken by the licensed service provider to rectify it; and
- (c) the Director’s reasons for believing the non-compliance warrants recording.
(4) The Director of Regulation must ensure that the licensed service provider is notified as soon as is reasonably practicable after a record of non-compliance is made by the Director.
29B Formal warning
(1) The Director of Regulation may take action under this regulation in relation to a licence held by a licensed service provider if satisfied that the service provider has not complied with, or is not complying with,—
- (a) a requirement of these regulations; or
- (b) a condition of their licence.
(2) The Director of Regulation may, by written notice, issue a formal warning to the licensed service provider.
(3) The notice must state—
- (a) the reasons for the formal warning; and
- (b) the steps that must be taken by the licensed service provider by a specified date to avoid further action.
(4) The notice may contain any other information that the Director of Regulation thinks appropriate.
29C Written direction to remedy risk to health and safety
(1) The Director of Regulation may take action under this regulation in relation to a licence held by a licensed service provider if satisfied that—
- (a) the service provider has breached, or is likely to have breached,—
- (i) a requirement of these regulations; or
- (ii) a condition of their licence; and
- (b) the non-compliance poses a risk to the health and safety of any person.
(2) The Director of Regulation may, by written notice, direct a licensed service provider to take a specified action to remedy the risk to the health and safety of any person within—
- (a) 24 hours; or
- (b) any longer period up to a maximum of 10 working days.
(3) A direction under subclause (2)(b) may be given only if the Director is satisfied that the licensed service provider can continue to operate the service without risk to the health and safety of any person.
(4) The direction must specify the date (in accordance with subclause (2)) by which the licensed service provider must carry out the specified action.
(5) The Director of Regulation may, in the written notice, impose any conditions that the Director thinks fit relating to—
- (a) remedying the risk to health and safety; or
- (b) the continued operation of the service.
6) The Director of Regulation may amend or revoke a direction given under subclause (2).
(7) If the Director of Regulation amends or revokes a direction, the Director must provide written notice to the licensed service provider of the following:
- (a) the amendment or the revocation:
- (b) the reasons for the amendment or revocation:
- (c) in the case of an amendment, the date by which the direction must be complied with (which must not exceed the 10-working-day time frame that applied to the original direction).
29DSpecialist help
(1) The Director of Regulation may take action under this regulation in relation to a licence held by a licensed service provider if satisfied that the service provider has not complied with, or is not complying with,—
- (a) a requirement of these regulations; or
- (b) a condition of their licence.
(2) The Director of Regulation may, by written notice, require the licensed service provider to employ or engage specified specialist help for the purpose of facilitating compliance with these regulations or applicable licence conditions, or both.
(3) The notice must specify—
- (a) the non-compliance that the specialist help must address; and
- (b) the date by which the non-compliance must be addressed.
(4) The notice may do either or both of the following:
- (a) identify particular persons or types of persons whom the licensed service provider must employ or engage:
- (b) require the service provider to give the Director of Regulation a report or reports (for example, a progress report and a final report) on the specialist help—
- (i) by the specified time; or
- (ii) at the specified intervals; or
- (iii) both.
(5) A licensed service provider who receives a notice under subclause (2) must—
- (a) employ or engage the specialist help as soon as is reasonably practicable; and
- (b) pay the fees and reasonable expenses of any person employed or engaged to provide specialist help; and
- (c) if applicable, provide a report to the Director at the time or intervals specified in the notice.
(6) The Director of Regulation may amend or revoke 1 or more requirements specified in the notice, including the time frame for implementing 1 or more requirements.
(7) If the Director of Regulation amends or revokes any requirements specified in the notice, the Director must notify the licensed service provider in writing of—
- (a) the amendment or revocation; and
- (b) the reasons for the amendment or revocation.
29E Improvement plan
(1) The Director of Regulation may take action under this regulation in relation to a licence held by a licensed service provider if satisfied that the service provider has not complied with, or is not complying with,—
- (a) a requirement of these regulations; or
- (b) a condition of their licence.
(2) The Director of Regulation may, by written notice, require the licensed service provider to prepare, implement, and complete an improvement plan.
(3) The notice must specify—
- (a) the non-compliance that the improvement plan must address; and
- (b) the date by which the non-compliance must be addressed.
(4) A licensed service provider who receives a notice under subclause (2) must prepare a draft improvement plan within 15 working days after receiving the notice and submit it to the Director of Regulation for approval.
(5) The Director of Regulation may negotiate with the licensed service provider to agree an improvement plan, but if, after a reasonable period, the service provider and the Director have not agreed a plan, the Director may give notice to the service provider that the Director will approve a particular plan and require it to be implemented.
(6) When the Director of Regulation has approved a particular improvement plan, the licensed service provider must implement it in accordance with its terms, unless the Director directs otherwise.
(7) The Director of Regulation may amend or revoke 1 or more terms of the improvement plan, including the time frame for implementing or completing all or part of the plan.
(8) If the Director of Regulation amends or revokes a term of the improvement plan, the Director must notify the licensed service provider in writing of—
- (a) the amendment or revocation; and
- (b) the reasons for the amendment or revocation.
29F Public notice of non-compliance
Mandatory public notice
(1) The Director of Regulation must give public notice of non-compliance by a licensed service provider with a requirement of these regulations or a condition of their licence if the Director has taken 1 of the following actions in relation to the licence:
- (a) reclassified the licence as a provisional licence under regulation 15:
- (b) suspended the licence under regulation 30:
- (c) cancelled the licence under regulation 32.
Discretionary public notice: non-compliance with regulations or licence condition
(2) The Director of Regulation may give public notice of non-compliance by a licensed service provider with a requirement of these regulations or a condition of their licence if satisfied that—
- (a) it is in the public interest to do so; and
- (b) the circumstances in subclause (3) apply.
(3) The circumstances are that the Director has taken 1 or more of the following actions against the licensed service provider in relation to their licence:
- (a) given the service provider a written direction to remedy a risk to health and safety under regulation 29C:
- (b) required the service provider under regulation 29D to employ or engage specialist help:
- (c) required the service provider under regulation 29E to prepare, implement, and complete an improvement plan.
Requirements of public notice
(4) Public notice given under subclause (1) or (2) must contain—
- (a) a summary of the action taken by the Director; and
- (b) if applicable, a statement that action has been taken by the Director under—
- (i) regulation 17(1)(a) or (b); or
- (ii) regulation 31(5)(a) or (b).
(5) The Director must ensure that the public notice does not contain personal information (within the meaning of section 7(1) of the Privacy Act 2020), unless the Director considers that publicly notifying the information is necessary to achieve the purposes of these regulations.
