Education Minister Chris Hipkins says he is "disappointed, but not surprised" with the decision of Primary School teachers to strike next month.
But he today revealed he has been in conversations with Finance Minister Grant Robertson about education's "pretty ambitious agenda" and how Budget 2019 would reflect that.
He said many of the issues teachers had been raising recently would be addressed in next year's budget.
Last night, primary school principals and teachers voted to walk off the job in a series of rolling strikes next month.
This follows a national strike on August 15 and NZEI members' rejection of a second offer by the Ministry in late September.
Speaking to media at a central Wellington Primary School, after opening a new building, Hipkins said he "certainly understands the issues that teachers are raising.
"We know we have a lot of work to do, there is no question about that and we're committed to working our way through that process."
He said he was pleased both the NZEI and the Ministry of Education have agreed to go into a facilitated mediation process.
"We need to come together and fix the problems."
He said the Government had "always been clear" to teachers that it's committed to addressing all the issues they have raised, and the problems would be worked out in a "measured and balanced way and that was going to take some time".
He had previously said that teachers' pay concerns could not be solved in just one budget.
But Hipkins today said he was already in talks with Finance Minister Grant Robertson about next year's budget and what the education budget should look like.
"We have a pretty ambitious agenda when it comes to education and a lot of it is going to cost money.
"Actually, many of those things we have been talking about through the budget process address the concerns that teachers have been raising."
The next step for teachers was a mediation process between NZEI and the Ministry of Education.
He would not be drawn on whether or not he thought the mediation would be able to prevent next month's strike action.
"I don't want to pre-empt what will come out of that mediation process, we're certainly going into that in good faith."
Hipkins said the Government has already made teachers a "pretty big offer" relative to what they had seen in the past.
Asked if the Government would consider using part of the $5.5 billion surplus it had as of June this year Hipkins said that surplus was "a one-off" and the Government needs to consider what was sustainable in the long-term.
Meanwhile, he pointed the finger at the previous Government for New Zealand's teacher shortage.
"We're playing catch-up here; we saw a 40 per cent reduction in the number of people training to be teachers in the last Government and the schools are feeling the effects of that right now."
National's Education Spokeswoman Nikki Kaye said her party had previously raised questions about the Government's collective bargaining for primary and secondary teachers.
"I believe there is huge public support for teachers getting more. National didn't have the same options that Labour has but now that New Zealand has larger surpluses we have options."