That's according to a Mitchell Institute for Education and Health Policy at Victoria University report about the accessibility of centre-based day care subsidised by the Commonwealth Child Care Subsidy.

It found 42 per cent of people in regional NSW live in areas considered childcare deserts, where three or more children are vying for each space available.

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Institute policy fellow Hannah Matthews said while Maitland and Newcastle topped the list of regional NSW locations with sufficient places at 1.8 and 2 children per place respectively, the figure for across the Lower Hunter was 3.2 children per space.

"What we've found is in regional hubs where you often have a lot more jobs available you then see a higher provision of childcare services available there, but as you start moving out of that regional centre and particularly where there isn't necessarily a high level of jobs available and people are more commuting into that centre, that's where you start to see childcare spaces drop off," she said.

"Although we're not classifying Newcastle as a desert, from a parent's perspective you're still looking at a fair amount of competition."

Meanwhile, the Upper Hunter was fifth on the list of regional NSW areas with the greatest shortage of spaces, with 5.4 children per place.

The report said unlike governments directly funding and providing universal access to public education, individual providers largely determined the availability of childcare, deciding their locations and fees.

It found areas with the highest fees also had the highest levels of accessibility, which it said suggested providers were choosing new locations based not just on demand, but profits too.

It said research suggested families in low socio economic areas had less access than those in advantaged areas.

Ms Matthews said every child needed high-quality and affordable early learning, regardless of their postcode.

"If we were to look at designing a system that was there for the benefit of children and really focused on those health and education benefits that children and families and mothers in particular would get from that, we'd see a system that was designed in a way that was more accessible, more affordable and more universal to actually be meeting those needs, whereas at the moment this report shows we're not ticking off on a lot of those parameters," Ms Matthews said.

"It's just so crucial children have access to high quality education and care in these years, we see the flow on effects in school and in terms of workforce participation and if we're serious about supporting families and women, mothers in particular, to be in the workforce, then this is really a crucial part of that."

The report said mothers with children under five in childcare deserts have lower levels of workforce participation.

It said while these lower levels would affect demand for childcare, difficulty in accessing childcare may also lead parents not to work.

Hunter MP Joel Fitzgibbon said he supported changes.

"The Morrison Government has neglected early education and as a result too many families across Australia are unable to access affordable child care," he said.

"Scott Morrison has no plan to fix his failed child care system.

"Only Labor has a plan - not only to make child care cheaper for four in five families, but also to completely overhaul Scott Morrison's failed system."

He said Labor had committed to two comprehensive reviews of the system through the ACCC and Productivity Commission.

"These reviews will take a thorough look at the system, including affordability and accessibility - with the Productivity Commission focusing on how to transition a 90 per cent universal subsidy for every Australian child, including those in the Hunter."

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