The Productivity Commission's latest report shows the capital was third in Australia for children up to two engaged in informal learning activities, with 58.8 per cent of parents reading with their offspring seven days each week.

But that figure plummets to 43.7 per cent for children aged three to eight, below the national average of 48.5 per cent. Only South Australia was lower with 42.3 per cent.

The report noted the importance of reading activities with children. "A supportive home-learning environment through shared learning activities between the parent and the young child, including reading to children on a regular basis, is a key requirement to assist young children to reach cognitive development milestones," it said.

It said home literacy activities had been linked to improved reading, vocabulary, general information and letter recognition skills in children entering school.

The commission published the childcare, education and training section of the 2014 report on Tuesday. The remainder of the yearly report card, which is broken into seven volumes, will be released over four days this week.

The report showed the ACT was the only jurisdiction where the median weekly cost of centre-based long day care exceeded $400, well above the national average $364. The cost meant Canberra families using long day care paid the highest percentage of their income on out-of-pocket costs. On a positive note, the territory led the country with the highest proportion of children aged up to five attending an Australian government-approved childcare service in 2013.

The proportion of childcare primary contact staff with a relevant formal qualification at or above certificate III rose from 46.8 per cent to 50.6 per cent, an increase of more than 400 staff achieving the qualification since 2010.

The ACT also ranked first or equal first in all 20 areas of NAPLAN testing, up from 16 in 2012.

Aboriginal and Torres Strait Islander students in the territory produced mean NAPLAN scores higher than the national result.

The proportion of them achieving at or above the national minimum standard also surpassed the Australian result.

ACT Chief Minister Katy Gallagher said the report showed ACT students were among the best performers in the country.

Ms Gallagher said education was a key priority for her government and she tried to cement Canberra as the "Education Capital".

"We will continue to invest to ensure all young people have the opportunity to thrive and achieve the best outcomes through quality teaching and learning," Ms Gallagher said.

"Education and training is the bedrock of a successful community and through this report, we are seeing the outcomes a high-quality system such as ours is achieving."