Some childcare providers are expected to quit, and those who stay in the business may raise their fees, under a new policy requiring home-based carers to become qualified.
The new regime, unveiled by Education Minister Chris Hipkins today, will require home-based carers to have, or be working towards, early childhood education qualifications at Level 4 in the qualifications system - one year beyond the top high school exams.
Education Minister Chris Hipkins told Larry Williams they will be putting in measures to ensure that the home-based carers receive support and are look after well.
"The government is putting a lot of taxpayer funding into the home-based child education sector, and we want to make sure the kids are getting the best quality experience.
"The rest of that is going into the home-based providers, the people who coordinate the system. We want to make sure they are putting a significant amount of that into supporting the carers."
Hipkins says this isn't a monetary decision, it is about quality and ensuring kids get the best education possible.
"We know parents are choosing to put their kids into home-based early childhood education so they can receive a more personal education. There is a risk if we go too hard and fast, people will leave the business. We want to work with the providers to ensure everything runs smoothly."
Babysitters and grandparents looking after their own family members are not affected by the change because they do not currently receive a state subsidy.