A report comparing OECD nations on education has early-childhood organisations asking why Australia is lagging so far behind.
The latest snapshot of the education system has revealed government spending is the seventh-lowest in the 35-nation group, and highlights the country's reliance on private funds.
Early learning advocates are particularly unhappy, pointing to the low participation rate for three-year-olds and the comparatively small share of its gross domestic product allocated to early childhood education.
In contrast, five per cent more four-year-olds than in the previous year are taking part in pre-primary education.
CEO of Early Childhood Australia, Sam Page, said the fact that the government funds pre-school education for four-year-olds but not three-year-olds discourages many families.
"I think most families would like their children to be in education, but cost is often a barrier," she said.
Ms Page told SBS World News that other obstacles include a lack of affordability, distance and a lack of knowledge around the benefits of early learning for children.
Furthermore, many children are starting school when they're not fully ready, having not yet developed adequate social and cognitive skills.
According to Ms Page, one in five children are developmentally vulnerable, while that number jumps to two in five for Aboriginal and Torres Strait Islanders.
She said that's where early education is more important than ever.
"What children benefit from is being with other children, learning together, learning to cooperate, learning to regulate their own emotions, learning to join in group activities and to be curious," she said.
"That's the most important thing we can do for younger children, is to give them confidence and create children that are keen to learn and will learn through their lifespan."
Ms Page says she is particularly concerned about a statistic that shows 30 per cent of children enrolled in early learning aren't attending for the whole government-funded 15 hours per week.
And she believes the economy would also benefit from a boost to early learning.
"There are three areas where it returns benefits to the economy. One is the taxes paid by working families, the second one is the better education performance from more children staying and finishing school and going on to tertiary study, and the third is - the major return to the economy, is reducing disadvantage," she said.
Not just teaching factories
Almost half of all Australians aged 25 - 34 have a tertiary qualification, outstripping the OECD average of 43 per cent.
Australia also has one of the lowest numbers of students choosing to student overseas, compared to its intake of international students which stands at 15 per cent.
Add to that, a comparatively low share of graduates in engineering, manufacturing and construction among tertiary-educated adults, 11 per cent compared to an OECD average of 17 per cent.
Labor's education spokeswoman Tanya Plibersek said the report reveals the importance of the nation's higher education sector.
She has told the ABC, the system must keep up with the needs of Australians.
"This is about providing the best possible education for Australian students," she said.
"Universities aren't just teaching factories, they are drivers of research and innovation."
The government is trying to pass higher education changes through the Senate, reducing university funding and raising fees.
People will also be required to repay loans sooner.