The soaring prices of childcare, supply and staffing issues will be in the spotlight when an inquiry into the sector gets under way.
The government has outlined the terms of reference for a consumer watchdog investigation into childcare.
Treasurer Jim Chalmers has directed the Australian Competition and Consumer Commission to examine the cost of operating a childcare centre, competition in the market and supply and demand.
The cost of childcare charged to families will also be examined, along with how government policy is impacting the sector.
Services in the industry in cities and regional areas will be looked at, as well as different types of childcare such as outside school hours and family day care.
The inquiry was announced by the government earlier this year, with work slated to begin by the beginning of 2023.
An interim report will be handed down in June 2023, before a final report is unveiled by the end of next year.
ACCC chair Gina Cass-Gottlieb said she welcomed the chance to oversee the review.
"This is an important and welcome opportunity for the ACCC to explore, analyse and report on the factors that drive prices in the childcare sector," she said.
"Access to affordable childcare that meets the need of growing children and their families is critical for workforce participation and the Australian economy."
As part of the inquiry, the commission will also look at how prices for childcare have changed since 2018 and how policies have affected the costs.
Talks will be carried out with childcare operators as well as customers, with the schedule to be published soon.
"We are eager and have already started preparations to undertake this important work," Ms Cass-Gottlieb said.
"We expect to shortly begin information gathering and engagement with the sector."
Childcare was a centrepiece of cost of living relief measures in last week's federal budget, with $4.7 billion to be spent in the next four years to make the service more affordable for 96 per cent of families.
Laws aimed at lowering the cost of childcare for families are before the parliament.
