Early Childhood centre owners say the government needs to talk about how to fund increased cost of pay parity for early childhood teachers. Photo: 123rf
Some early childhood centres do not know how they will cover the cost of pay parity for their teachers.
A centre owner and a chairperson of a non-profit centre both told RNZ they did not want to raise the fees charged to parents to bridge the gap between government funding and higher pay rates.
Jamie Lynch said the shortfall for the 27-child non-profit early childhood centre he chaired was $50,000 a year, and Vince Grgicevich said the gap was about $120,000 at each of the three centres he owned.
The centres received more government funding for signing up to pay parity, but the money was not enough to cover the full cost of bringing their teachers' salaries to the same level as similarly-qualified kindergarten and school teachers.
Lynch said his centre made the decision because it was worried about the effect of the rising cost of living on its teachers and because it was hard to hire and retain qualified teachers without offering pay parity.
"We were finding it increasingly difficult, and still are, to attract good new talent to the centre. And that's because we've got 85 percent of childcare centres across the country offering pay parity and versions thereof and we need to be consistent with our peers," he said.
"While it was a choice that we made, I don't feel that it was necessarily a choice in the sense that we could have done something different.
"It was really the only option on the table for us. So we took it with heavy reservations and a lot of concern, but if we didn't take it we kind of felt that we would be signing a death knell for the centre anyway because we wouldn't be able to attract the staff we needed to carry on."
Lynch said the centre did not want to cover the shortfall by increasing parents' fees because that would cost some families several thousand dollars a year.
"Our fees are pretty eye-watering as they stand and I'm pretty reluctant to impose further costs on hard-working parents."
The other option was to employ fewer teachers and reduce the teacher-child ratio, which was currently better than the required minimum, or hire less-experienced, cheaper teachers, Lynch said.
Small centres were disproportionately affected by the costs of pay parity because they did not have large budgets to manage the extra cost, he said.
The government needed to talk about how to fund the increased cost of pay parity for early childhood teachers, he said.
"I don't think we're going to be able to find the money in and of ourselves unless there is external assistance."
Grgicevich said parity resulted in a 22 percent increase in government funding and a 32-36 percent increase in wage costs for this centres which were licensed for 100 children each.
The shortfall would be about $120,000 to $130,000 a year for each centre, he said.
"The funding they're giving us at the moment isn't even covering wages, that's the reality. The hole's just got so big," he said.
"There's been stories about centres closing down, staff not getting paid, centres starting to take away quality. Those things are happening in the industry because people are just trying to get through."
Grgicevich said he opted into pay parity because it would be hard to retain staff without it and because it was the right thing to do.
"We all believe in that but in practice it hasn't really worked," he said.
He would eventually have to raise his fees, he said.
"I keep holding off because the parents can't afford it where I am with my childcares, Mount Wellington, Mount Roskill. Very difficult when you're charging a parent $300 a week to look after a baby, to increase those fees. They're pretty stretched as it is," he said.
The government should fund pay parity properly, he said.
"It's not about lining your pockets, I mean we're just going backwards. And I know personally over the last 18 months, two years our centres have lost money," he said.
On Monday the Early Childhood Council warned small centres would struggle most with pay parity because a survey indicated they had the highest proportion of experienced teachers.
Teachers' pay scale ran from $51,358 to $90,000 and a parity deal covering teachers in the top half of the scale began this year.