For many families in New Zealand, the joy of raising children is increasingly overshadowed by one harsh reality: the rising cost of childcare. As parents strive to balance career ambitions with their children’s development needs, the economic weight of early childhood education is becoming too much for many to bear.
Childcare in New Zealand: High Quality, High Price
New Zealand is often praised for the quality of its early childhood education (ECE) services. According to the 2021 UNICEF report Where Do Rich Countries Stand on Childcare?, the country ranks third in quality among 41 high-income nations. This high score reflects factors such as the qualifications of educators, low teacher-to-child ratios, and a curriculum—Te Whāriki—that emphasizes holistic child development (UNICEF Office of Research – Innocenti, 2021).
But this quality comes at a cost.
The same UNICEF report also found that New Zealand ranks among the least affordable childcare systems in the OECD. For an average couple with two children in full-time care, up to 37% of their household income may be needed to cover childcare expenses (UNICEF Office of Research – Innocenti, 2021). This figure is among the highest in the developed world, surpassing countries like Australia, the United Kingdom, and even the United States.
For many families, particularly those in lower- and middle-income brackets, these costs are unsustainable and force tough decisions: reduce work hours, forego career opportunities, or rely on informal or substandard care.
The Economic Toll: When Parents Can’t Afford to Work
One of the most significant consequences of unaffordable childcare is its impact on labour force participation, especially for mothers.
A 2022 study by researchers Thomas Benison and Isabelle Sin highlights the scale of this issue in New Zealand. Using data from the Growing Up in New Zealand longitudinal study, they found that mothers who cannot access affordable childcare often leave the workforce or significantly reduce their working hours. The result is not just a personal income loss for these women—it’s a macroeconomic issue. The study estimates a national loss of NZD $116 million per year in foregone earnings due to lack of accessible childcare (Benison & Sin, 2022).
This reinforces a stark truth: the lack of affordable childcare doesn’t just impact families—it weakens New Zealand’s economy by underutilizing the talents and potential of a large portion of the workforce.
Children Pay the Price Too
While the discussion often focuses on the financial impact on parents, the long-term effects on children are equally concerning. Quality early childhood education is linked to improved cognitive, emotional, and social outcomes. When families are priced out of formal care, their children may miss out on these benefits.
The UNICEF report cautioned that children in lower-income households in New Zealand are less likely to attend high-quality childcare, perpetuating cycles of poverty and inequality (UNICEF Office of Research – Innocenti, 2021). This limits access to early learning experiences that are crucial for school readiness and lifelong achievement.
Barriers Beyond Cost
While cost is the most cited barrier, it is not the only one. Limited availability in some regions—especially rural or less affluent areas—means that even those who can afford childcare may struggle to find a spot. Parents working non-standard hours also face difficulties, as most childcare services operate on a 9-to-5 schedule.
Additionally, New Zealand’s parental leave policy leaves much to be desired. Mothers are entitled to 26 weeks of paid parental leave, and partners can take only two weeks of unpaid leave. This limited support places additional pressure on families to find and afford childcare soon after a child is born.
A Call for Policy Change
Experts and advocates are increasingly calling for policy interventions to address these challenges. One proposal is to increase family tax credits or introduce childcare subsidies that scale based on income, similar to models used in countries like Sweden and Norway. These countries consistently rank at the top of global childcare assessments due to generous government investment and a universal approach to ECE access. International research shows that increasing public support (e.g., subsidies or tax credits) significantly improves childcare accessibility, especially for lower-income families (Ünver et al., 2018).
Children’s Commissioner Andrew Becroft has also urged the government to recognize the critical role of affordable childcare in both child development and workforce stability. “This essentially means that an average New Zealand couple must spend 37% of their income to have two children in full-time childcare—this is a huge amount,” he stated following the UNICEF report’s release.
Without significant change, the status quo will continue to strain families, widen socioeconomic gaps, and hinder economic growth.
What Can Be Done?
To relieve working parents and improve outcomes for children, policymakers should consider a combination of the following:
- Income-based childcare subsidies to reduce costs for low- and middle-income families
- Expanded parental leave, including paid leave for both parents
- Increased funding for early childhood centers, especially in underserved areas
- Flexible care models to accommodate shift workers and non-traditional schedules
- Incentives for employer-supported childcare programs
These solutions would not only ease financial pressure on parents but also improve children’s development opportunities and strengthen the national economy.
Conclusion: A Crisis Worth Fixing
Childcare in New Zealand is at a crossroads. While quality is high, access and affordability remain serious problems. The burden is heaviest on mothers, children, and families already struggling financially. Without immediate policy reform, the situation may worsen, leaving more parents forced to choose between work and care—and more children without access to the foundational support they deserve.
New Zealand must recognize that investing in childcare is not just a social obligation; it is an economic necessity. Affordable, accessible, and high-quality childcare benefits everyone—families, employers, and the country as a whole.
References:
- Benison, T., & Sin, I. (2022). The wage cost of a lack of access to affordable childcare in Aotearoa New Zealand. New Zealand Economic Papers, 58, 40 – 73.
- UNICEF Office of Research – Innocenti. (2021). Where do rich countries stand on childcare? UNICEF.
- Ünver, Ö., Bircan, T., & Nicaise, I. (2018). Perceived accessibility of childcare in Europe: a cross-country multilevel study. International Journal of Child Care and Education Policy, 12.