The prime minister has ruled out a royal commission into the nation's childcare system following revelations of sexual abuse and mistreatment of children.
Allegations of child sexual abuse are being ignored by regulators, while service providers are prioritising profit over children's care and regulations aren't being enforced, an ABC Four Corners investigation found.
Up to 47,000 children are attending for-profit facilities that are failing to meet national standards, the program said.
A group advocating for parents wants the government to play a greater role in weeding out wrongdoing in the nation's profit-driven childcare system, including capping out-of-pocket fees at $10 per day and ensuring enough childcare places across Australia.
Almost three-in-four childcare services are privately owned, contributing to soaring fees and shortages in rural and lower-income areas, despite the government providing billions in subsides annually, The Parenthood chief executive Georgie Dent said.
"Funding through the Child Care Subsidy ... is effectively a blank cheque for dodgy providers who choose to make a quick buck at the expense of quality education and care of children," Ms Dent said.
The Australian Education Union is calling for greater government intervention in the sector, saying the revelations show the market-based approach is broken.
"There are too many ruthless operators who are only involved in this sector to make a profit at the expense of the education, care and too often the health and safety of young children," union Victorian branch president Justin Mulally said.
More must be done to attract and retain qualified staff, including increasing pay and conditions, expanding public early childhood learning and significant improvements to the regulator, he said.
Child and family advocacy group The Front Project said Australia has been a world leader in the early childhood education and care sector, with about one-in-five services exceeding benchmarks.
Despite that, the Four Corners investigation found the current funding and regulatory model was not doing enough to keep out providers who were only interested in profits, even at the expense of childrens' welfare.
In its 2024 research, the organisation found for-profit services were less likely to be high quality, with 15 per cent of for-profits rated exceeding or excellent compared to 28 per cent of not-for-profits.
"Quality in early education is not an accident," chief executive Caroline Croser-Barlow said.
Prime Minister Anthony Albanese says investigations and action will be taken against providers who breach standards, saying everyone expects children to be treated properly with respect.
But he ruled out calls from the Greens to establish a royal commission.
"They take years, they cost a lot of money. You don't need a royal commission to show that what was on TV last night is wrong," Mr Albanese told reporters on Tuesday.
The federal government would work closely with state and territory counterparts responsible for approving and ensuring providers comply with the National Quality Framework, Treasurer Jim Chalmers said.
"Clearly that hasn't been adhered to in these instances, and these services have fallen way, way short in very dangerous and distressing ways," Dr Chalmers told ABC radio.
Former Labor senator Fatima Payman said the prime minister needed to order an urgent national cabinet meeting to demand more inspections and tougher penalties and establish a National Childcare Ombudsman to support families.
