Early Childhood centres will be allowed to triple the number of children they are licensed to care for - from 50 to 150.
The controversial change has sparked fears of "child farms" from care workers.
The NZ Educational Institute - the union representing childcare workers - said the move was "abhorrent" and not in the interests of New Zealand's most vulnerable citizens, its children.
The new regulations allow up to 75 children aged under 2, instead of the existing 25. This could "freak out" the toddlers, said NZEI national executive member Hayley Whitaker.
But Early Childhood Council chief executive Peter Reynolds argued it was just an "administration change".
Some centres already had 150 children, he said, but erected fences between different areas and applied for multiple licences. "The new regulation just cuts paperwork, bureaucracy, ERO audits and ultimately costs for centres."
Cost is a big issue. The Government cut its childcare subsidy last year, meaning childcare centres have been forced to raise fees and look for efficiencies. Tripling the number of children in a centre would be one such efficiency.
Education Minister Anne Tolley said it was not her role to regulate the size of groups of children in childcare.
She trusted childcare centres to have reasonably sized groups, she said, and parent power would guarantee that. If groups got too big, parents would pull their kids out.
Tolley said teacher-child ratios remained unchanged and it was unclear why the restriction of 50 kids (age 0-5) per centre had been set.
But Reynolds and Children's Commissioner John Angus both agreed it was important for the Government to address the size of groups within centres.
Angus said there was considerable evidence that group size had a significant impact on the quality of care provided by childcare centres.
Research had found that six was the ideal number of infants and toddlers in one space, and eight the maximum.
There were also issues around health and safety.
"The key thing is about the size of the groups within the centre and the design of the space. As long as there are smaller groups with their own areas to sleep, eat and play - and their own set of staff who know them well - the risks can be mitigated," Angus said.
Busting at the seams: Triple childcare trouble
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