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'Qualified grandparents' could be paid for childcare.

Federal politicians Michelle Rowland and John 'Wacka' Williams react to a report by the productivity commission calling for reform in the childcare sector.

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Prime Minister Tony Abbott has dismissed a Productivity Commission suggestion that funds be redirected away from his signature paid parental leave scheme and into childcare services, arguing the two are ''very separate issues''.

But the minister responsible for childcare, Sussan Ley, appears open to the idea of federal government-supported nannies if they were employed within the ''existing regulated system''. The Assistant Education Minister said she wanted to solve the crisis of finding childcare for shift workers, who might work beyond the time that childcare centres are open.

''We won't be paying for au pairs to unstack the dishwasher,'' she told Radio National.

The Productivity Commission released a 900-page interim report into childcare on Tuesday, suggesting that multiple subsidies be replaced with a single means-tested payment that would go to the parents' provider of choice.

The report, which is open to public feedback, also suggests that nannies and grandparents could be eligible to receive government payments if they had the proper early childhood education qualifications.

In politically charged comments, the Productivity Commission took a swipe at the Abbott government's paid parental leave scheme, which seeks to pay the primary carer their wage for 26 weeks, plus superannuation, capped at an annual salary of $100,000.

This is a significant increase on the current scheme, introduced under Labor, which pays women the minimum wage for 18 weeks.

''There may be a case, therefore, for diverting some funding from the proposed new scheme to another area of government funding, such as [early childcare education and care], where more significant family benefits are likely,'' the report stated.

On Tuesday, Mr Abbott stood firm on his signature policy, which has also been critiqued by the Commission of Audit and criticised by Coalition MPs.

''In relation to paid parental leave and issues around childcare, this is not an 'either or' situation. PPL and childcare are two very separate issues,'' a spokeswoman for Mr Abbott said.

Ms Ley stressed that the Productivity Commission had only issued a draft report at this stage, but she appeared to back the idea of simplifying payments, while noting the government was not looking to means test them.

"I think a single payment is important," she told Radio National. "Whether it’s means tested or not, we have no plans for that right now."

The Productivity Commission’s initial report cautioned against making childcare tax deductable – as this is not an "effective means of support for lower and middle income families" – but Ms Ley said it was still on the table for the government.

The Commission will release its final report in October and Ms Ley said she wanted to have new policies ready for early 2015.

David Byrne, the acting national secretary of United Voice, said that childcare workers’ union wasn’t opposed to including nannies in the childcare rebate, as long as they were properly qualified.

But he expressed concern that introducing new types of childcare workers would put even more pressure on existing funding.

Labor’s education spokeswoman Kate Ellis said that "funding things like nannies can only come from cutting existing childcare support".

With Miki Perkins

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