Productivity Commission care economy report signals opportunities for early childhood reform

A renewed focus on value, prevention and collaboration across Australia’s care services could pave the way for meaningful reform in early childhood education and care, according to the Centre for Policy Development’s (CPD) response to the Productivity Commission’s interim report Delivering Quality Care More Efficiently, released on 14 August 2025.

The Centre for Policy Development (CPD) has welcomed the release of the Productivity Commission’s interim report Delivering Quality Care More Efficiently, highlighting its potential to support a more integrated, outcomes-driven care economy.

The report spans multiple sectors, including health, disability, aged care and early childhood education and care (ECEC) and proposes reforms that could influence how early learning is valued, funded and delivered.

Recognising the broader value of care

The Commission calls for a shift in how productivity is measured across the care economy, urging governments to move beyond cost-efficiency metrics and recognise the broader social value of care services.

CPD Chief Executive Andrew Hudson noted that the report’s recommendations place quality, outcomes and prevention at the centre of how care is assessed and delivered. In ECEC, this approach could help build a case for increased investment in services that support children’s development, family wellbeing and long-term community outcomes.

Investing in prevention and early intervention

A key recommendation of the report is the creation of a National Prevention Investment Framework, guided by an independent advisory board. This framework would support consistent and transparent government investment in prevention strategies designed to improve outcomes and reduce costs over time.

CPD has called for the framework to extend across all policy domains, including early learning. Within the ECEC context, such an approach could highlight the long-term benefits of early intervention, improved school readiness and reduced reliance on remedial or crisis services.

Strengthening collaboration and funding stability

The Commission’s recommendation to implement collaborative commissioning initially proposed in a health context has broader relevance across the care economy. CPD has advocated for this model to be adopted in the ECEC sector to improve service integration and responsiveness.

In practice, collaborative commissioning could foster stronger partnerships between governments, councils, providers and communities, supporting the design of place-based programs that meet local needs. When paired with long-term, secure funding, this model would enable services to plan effectively and maintain quality.

Addressing regulatory burden and funding equity

The interim report also highlights the benefits of streamlining regulation to reduce administrative burden, enabling frontline staff to focus more on direct care and support. CPD notes that in sectors such as ECEC, where services operate under a mix of funding and delivery models, further exploration of approaches that enhance transparency and support workforce sustainability could be valuable.

A foundation for sector-wide reform

While the final report is yet to be released, CPD describes the interim findings as a strong platform for future reform. For the ECEC sector, the proposed changes offer a timely opportunity to improve quality, secure equitable access, and embed prevention and collaboration into practice.

Read the full CPD response here.