This article explores discourses of economic investment and child vulnerability that have become dominant under New Zealand’s National-led Government as a rationale for policy directions in early childhood education. It highlights the need for explicit values about children and childhood to be a basis for early childhood policy development, with a commitment to equity and democratic citizenship being a good place to start. The article draws on policy document analysis, policy evaluations and research to argue that current policies have run counter to a democratic view of citizenship, and led to a swing away from universal approaches to education for all towards targeted interventions for priority children. At the same time, a drive for measurable outcomes is in danger of funnelling early childhood education into narrow goals that bypass a broad view of what education might possibly be. Ideas for future policy directions are discussed.