Government stands by PPL after critical review

The Abbott government is defending its plan for a generous paid parental leave scheme after the policy was criticised in a major review of childcare.

The Productivity Commission says it's unclear whether Prime Minister Tony Abbott's multi-billion dollar PPL would bring additional benefits beyond the existing cheaper scheme introduced by Labor.

In its draft report, the commission recommends some money be diverted from the PPL to the childcare system as an alternative way of getting more mothers into the workplace.

But Assistant Minister for Education Sussan Ley has rejected the commission's criticism of the scheme, saying childcare policy and paid parental leave should be considered separately.

"Childcare is about about looking after your children when you go back to work," she told ABC television.

"Paid parental leave is about having children in the first place, having those vital six to twelve months to bond with your baby."

Mr Abbott's signature PPL has been widely criticised as too expensive and generous, with working women to be paid up to $50,000 to have a baby.

Ms Ley says she backs the scheme, which even some coalition MPs would like to see scrapped.

"It is the right policy for the modern woman, in a modern workplace, and a modern generation," she said.

The Productivity Commission also recommends extending government subsidies to qualified nannies and other in-home care.

Ms Ley would not say if she supported such a change but pointed to the "crisis" experienced by shiftworkers trying to find childcare.

"This is after all a 24/7 economy, not a nine-to-five working week any longer," she said.

"If we end up including nannies or in-home carers in the childcare system, they will be regulated."

The commission recommends streamlining government assistance for child care into a single early care and learning subsidy.

The per-child payment would be means and activity-tested, paid directly to child care providers and cover up to 100 hours a fortnight.

There would be a top-up for children with extra needs.

The commission suggests the government pay 90 per cent of costs for families on less than $60,000 a year and tapering down to 30 per cent for families bringing in more than $300,000.