Childcare centres that hike fees to cover subsidy increases have been warned they will be in the consumer watchdog's sights.
Federal childcare rebates will increase from July 1 with more than one million families hoping to benefit.
While it should mean a reduction in out-of-pocket fees, concerns have been raised that the savings will be swallowed by childcare centres increasing fees to cover rising costs.
Education Minister Jason Clare said the Australian Competition and Consumer Commission was monitoring for unreasonable hikes and whether centres play by the rules.
"If they don't, then they stand ready to act and give us the recommendations we need to make sure parents get value for money," he said in Melbourne.
The minister said the government was looking to see whether Medicare-styled universal child care was a future possibility.
Prime Minister Anthony Albanese said the childcare changes would make a difference to family budgets.
"People have been anticipating this change since we were elected in May of last year," he said.
"You're already seeing, as a result of that, more early learning centres being opened, more people training and getting the skills they need."
Childcare company Goodstart chief executive Ros Baxter said the cost of its services had risen in line with inflation but further increases would not be made following the subsidy rise.
"After the (subsidy) increases 92 per cent of our families will be better off, most of them really significantly better off. These are really substantial investments the federal government's making in cheaper child care," Dr Baxter told ABC Radio.
It comes with the consumer watchdog to hand an interim report on its inquiry into childcare services to Treasurer Jim Chalmers on Friday.
The final report will be handed down in December, following talks with industry stakeholders after the childcare subsidy changes come into effect.
Opposition early childhood spokeswoman Angie Bell said inflation was causing fee rises of up to seven per cent for child care, adding pressure on families during a cost of living crisis.
"We warned this government time and time again this would happen and they waved us off, saying fees wouldn’t rise and families would get much needed relief," she said.
"It's clear they have no idea what they’re doing."
Early childhood group Thrive By Five director Jay Weatherill said any price rises beyond CPI, or that do not contribute to better quality, are unacceptable.
"Families will be better off financially regardless of increases but providers who use this nation-building reform to build more profit off the backs of educators and families shouldn't be given a free pass to price gouge," he said.
