Governments are being urged to lift funding for childcare services after a landmark report found it is unequal and inadequate across Australia.

Nine million Australians live in so-called “childcare deserts” where kids outnumber care spaces three to one, according to first-of-its-kind data published by the Mitchell Institute and Victoria University on Tuesday.

The poorest families live in areas where the median number of childcare spaces is just 0.35 per child, while the richest areas have 0.46 spaces.

Researchers blamed the design of Australia’s childcare system, saying providers are encouraged to set up shop in high-income suburbs where they charge higher fees – leaving poorer families behind in the process.

They want the federal government to pledge a childcare guarantee that would ensure access to early childhood education and care for all kids.

It comes as Treasurer Josh Frydenberg touts the government’s “record spending” on childcare in the lead up to the election, with more than $10 billion a year now being outlaid by federal taxpayers.

But Peter Hurley, policy fellow at the Mitchell Institute, said there’s need for a “change in mindset” that puts children at the centre of new funding rather than just making subsidies to private providers more generous.

He said governments must adopt a broad reform agenda to tackle low wages and a shortage of qualified workers across the sector, while also providing additional funding to ensure services in lower-income areas.

“Start with the children, then work your way out,” Dr Hurley told TND.

“The time has come to look at this differently – changing the sticker price [on child care] isn’t going to fix the fundamental issues.”

Experts have argued that universal early childhood education and care, which would require billions in new taxpayer funding, will pay for itself in higher levels of work participation among both mothers and fathers.

And, crucially, evidence shows access to early childhood education is an important asset to children as they begin primary school and later work.

"Current policy settings mean that where Australians live still plays a significant role in whether they can access this crucial service," Mitchell Institute and Victoria University researchers said in their latest report.

"Children need a system that meets their needs so they can have the best start in life, regardless of where they live or the income of parents."

Mapping Australia’s childcare deserts

According to the report, 35 per cent of all Australians live in areas with a much larger number of children aged under five than childcare spaces.

The proportion is as high as 78 per cent in remote areas, and as low as 29 per cent in major cities – where about 5.6 million people live in these childcare deserts.

About a million Australians live in areas without access to any child care.

What's most interesting about the research though is what it says about childcare equity and how that flows through to economic opportunities.

Neighbourhoods classified at the bottom of the socioeconomic scale are also ranked worst in terms of childcare accessibility, while areas where higher fees are charged are more likely to have better childcare access.

That suggests, researchers said, that childcare providers are operating in markets where they can charger richer families higher fees, leaving lower-income neighbourhoods without adequate access to services.

Alison Pennington, senior economist at the Centre for Future Work, said the data shows the government's funding model for child care is broken.

"At the heart of the failure of Australia’s childcare policy is the prioritising of creating profitable business models over expanded access," she said.

"Why is it that we created an early childhood education and care system that blocks access to large proportions of the population?"

Unequal access to child care also has a big impact on work participation.

Areas with better access to child care also have higher levels of parents in the workforce, the research found, with top-ranked areas in Brisbane where there's more than 0.5 places per child also showing the highest workforce participation among female parents with kids aged under five.

Moving  beyond higher subsidies

The report has recommended access to child care be guaranteed by the federal government, including three days a week of free or low-cost care.

This could work by setting universal care as a target, and then moving funding into place to achieve it, whatever those policy requirements are.

Dr Hurley said this would involve addressing shortages of qualified care workers and the low wages paid across the sector.

Governments also have a role in providing additional funding to ensure equal access to childcare services when the market does not, he said.

"We don't put children at the centre of our system," Dr Hurley said.

Ms Pennington said the government's focus has been on the "sectional interests of providers" over the economic dividend of accessible child care and the educational benefits to children themselves.

"Increasing affordability isn't sufficient," Ms Pennington said.

"Helping people buy into a stumbling system won't repair the system."

"There's a workforce crisis in early childhood care and education that pertains to the wages and conditions in the sector."

Centre for Future Work research has found an additional $2.8 billion in annual child care spending could create around 135,000 jobs per year by 2030.

The Morrison government has lifted funding for child care during COVID, but has stopped short of committing to a universal funding guarantee.

Reforms that came into effect earlier this month lifted childcare subsidies to a maximum 95 per cent for some families with more than one child.

However, childcare advocates have criticised the government approach, saying the boost to subsidies only helps a quarter of families using care.

Another 700,000 families don't benefit from the changes, research from the Mitchell Institute has found.