The Productivity Commission will launch an inquiry into how Australia’s childcare system can be improved to meet the needs of modern families.

The Abbott government on Sunday said the review would invite ideas from the community and childcare sector about ways the system could be more flexible, affordable and accessible.

Prime Minister Tony Abbott said families needed a childcare system that was affordable and allowed parents to work flexible hours knowing their children were receiving quality care.

“Our childcare system should be responsive to the needs of today’s families and today’s economy, not the five-day, 9am-5pm working week of last century,” Mr Abbott said in a statement on Sunday.

It’s the first public examination of child care and early-years learning since the 1990s, and fulfils an election promise from the Abbott government for a review within 12 months of taking office.

The Australian government is the largest funder of the childcare sector, and its expenditure of more than $5 billion every year is forecast to grow in coming years.

In 2012, nearly 20,000 childcare and early-learning services enrolled more than 1.3 million children in at least one childcare or preschool program.

The Abbott government said the inquiry was necessary because families were struggling to find quality and affordable child care, children with special needs weren’t being properly supported, and a “small but significant” number of children were starting school with developmental delays.

The inquiry would identify ways to improve the system so it supported workforce participation, addressed children’s specific needs, and was flexible for parents who didn’t work traditional hours.

It would also ensure the funding arrangements were sustainable and appropriate.

The commission will also consider any specific models of care, including from overseas, that could trialled in Australia.

Public hearings and submissions will be held before a draft report is released.

The final report should be provided before the end of October 2014.