Low-income families could receive free child care if the federal government accepts the key recommendations of a major report.
The Productivity Commission has been tasked with charting a course towards universal early childhood education and care.
In a set of draft recommendations, it has urged the government to modify childcare subsidies and increase access for children from all backgrounds.
Families would be able to access up to three days of subsidised care a week, regardless of how many hours they worked.
Households with an annual income of $80,000 or less would be eligible for a 100 per cent subsidy.
The changes would cost about $2.5 billion a year.
The commission also recommended measures to expand the childcare workforce.
It found children who attended early education performed better at school later in life.
However, the families that would benefit most were using child care less than average, or not at all.
Indigenous kids are under-represented in early education and child care because services are unaffordable, unavailable or culturally unsafe.
For low-income families, out-of-pocket fees and long wait lists for childcare centres in their local areas are major access barriers.
Those with kids in early education were spending up to one-fifth of their disposable incomes on child care.
"Vulnerable and disadvantaged children benefit the most from quality early childhood education and care, but they are the least likely to attend," Associate Commissioner Deborah Brennan said.
"A child's entitlement to at least three days a week should not depend on how much their parents work."
All children under the age of five should have access to 30 hours of early education per week, the commission said.
Increasing the subsidy would benefit about one in three families and boost the hours kids spend in early education centres by about 12 per cent.
It would also lead to a 3.4 per cent increase in hours worked by single parents and secondary earners, which is equivalent to an additional 20,700 full-time employees.
Jessica Rudd, CEO of parent advocacy organisation The Parenthood, welcomed the report.
"Many of these recommendations align with our vision for a fair and accessible early childhood education system," she said.
Productivity Commissioner Martin Stokie said expanding accessibility would require the government to address workforce shortages.
"We will not make any progress towards a universal system without addressing the sector's workforce challenges," he said.
"Improving pay and conditions is critical but more can be done to improve career and qualification pathways."
An early childhood education and care commission would also be created to support and monitor the government's progress towards universal access.
The government has introduced a number of changes to boost the childcare workforce and improve access for families.
