Education Minister Chris Hipkins has defended the Government's decision to fund a free year's tertiary study, rather than boost teachers' pay.
Primary school teachers will hold their first full-day strike since the 1990s on August 15, saying the Government's pay offer is inadequate.
The Ministry of Education is offering between 2.2 and 2.6 percent a year for three years. The teachers want 16 percent over two.
"This Government is more receptive to their concerns than the Government they've had for the last nine years," Mr Hipkins told Newshub Nation on Saturday. "We are working very closely with them, we are listening - but the financial bucket is not unlimited."
He said there's no chance the Government will give them what they want because the "claim they have on the table is well out of kilter with everyone else" and the present offer is "double" what they got under National.
"We know there is built-up demand there and we take that seriously."
Asked by host Simon Shepherd why the Government chose to spend $339 million in this year's Budget on giving tertiary students a year's free education, rather than boosting teacher pay, Mr Hipkins said it wasn't necessarily an either-or decision.
"We funded that out of cancelling the previous Government's tax cuts. That was not money they were intending to spend on education… and the future generation of teachers will benefit from it."
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Not as many people took advantage of the free year's study as the Government expected. Mr Hipkins says that's because the details of the scheme were announced late last year, after many people would have locked in their plans for 2018.
He also said the strong labour market was keeping wages up, so there was more incentive for people to join the workforce rather than study.
But he says more people are starting to enrol now.
"The mid-year numbers are looking very promising… I don't have official numbers, all I've got are the anecdotal reports… that mid-year enrolments are up."
Mr Hipkins also said 25,000 fewer people borrowed money this year to go into study - including future teachers - saving $150 million between them.
With 40 percent fewer people training to be teachers now than a decade ago, Mr Hipkins says the workforce is getting older - and lessening the cost of tertiary education is one way to incentivise people to become teachers.
"One of the challenges with teaching is the baby boomer cohort of teachers are the ones who are nearing retirement age. Many of those got their education, their post-school education, for almost free. What I'm saying is the future generation of teachers should have a better deal."