The federal government is considering funding preschools like it funds schools, with different amounts for private and public bodies, under a model to be discussed by the Council of Australian Governments.
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Under the proposal, which will go to Friday's COAG meeting as part of the federation reform process, preschool would be treated like the first year of formal schooling.
But an agenda paper for the meeting obtained by Fairfax Media, says there is "not yet consensus" between governments on how to reform preschool funding across Australia.
It sets out two options to be further developed for COAG's first meeting of 2016.
Option A would see Commonwealth funding continue under a similar model to the current situation. Funding would be based on a per child rate for the four year-old population across all different preschool settings, including preschool programs provided by long day care centres.
But it notes that the federal government's share of this amount "would need to be determined".
Option B "effectively treats preschool as the first year of formal schooling". This would see Commonwealth funding differ for government and non-government preschools. It notes that the current federal funding for schools sees about 17 per cent go to government schools and about 72 per cent for non-government schools.
The paper also notes that COAG should look at making it easier for preschools to offer before and after school care, to improve "access, choice and convenience for working families". This would be by removing regulatory barriers and enabling preschools to qualify for other childcare subsidies for care provided beyond preschool hours.
A national partnership agreement between governments currently provides for 15 hours of preschool a week, 40 weeks a year to all Australian children in the year before they start full-time school.
But as the Productivity Commission noted in 2015, there is still disagreement about "which level of government has ultimate responsibility for preschool funding".
There are also confusing differences in the federal funding provided to states and territories, as the Commonwealth spends more per child in states (such as New South Wales, Victoria and Queensland) that have more children attending preschool programs in long day care centres. This is because funds are provided both through the preschool funding agreement and childcare subsidies.
Friday's agenda paper also suggests that any COAG-level reform on housing and homelessness will have to wait at least another year. It says COAG should agree that ministers report back by the end of 2016.
The paper cautions against any hasty moves to extend Commonwealth Rent Assistance (CRA) to public housing tenants and in turn, abolish direct payments to states for housing and homelessness.
It notes that CRA is currently "not sufficient to enable housing providers to charge market rents to social housing tenants" and the arrangement would result in a funding gap for most states.
"Reform of CRA is therefore needed before this option would deliver on the principles of federation reform."
The paper calls for more focus to be put on affordable housing and better access to social housing for vulnerable people.
It says that the end of 2016 report date would also allow more work to be done on a national financing vehicle to "attract private investment in affordable housing".
