"The Productivity Commission’s recommendation that federal government funding for early childhood education and care should be better targeted is a welcome outcome of the review into Childcare and Early Childhood Learning," Business Council of Australia (BCA) Chief Executive Jennifer Westacott said.

“The government has committed $31 billion over the next four years for assistance to early childhood education and care. This funding should be targeted to maximise child development and workforce participation that is unlikely to happen without it.

“The Productivity Commission has mapped out a path where access to childcare for low income and disadvantaged families can be improved, while making the system fairer through better targeting.

“The Business Council supports the Productivity’s Commission’s aim of designing a system that is simple, accessible, flexible and has greater early learning opportunities. The recommendation to extend government assistance to home-based care services (including approved nannies), for example, would provide greater flexibility and choice for families.

“In responding to the final report it is essential the government consults extensively with stakeholders including business, to ensure any changes deliver a more effective child care system that supports greater workforce participation.

“If the government accepts the Productivity Commission’s recommendations, they should consider whether they can deliver the reforms within the current funding envelope,” Ms Westacott said.