The national peak body for First Nations children and families has called for the creation of a new early years service model reflecting the "unique" needs for Indigenous children.

SNAICC chief executive Catherine Liddle will tell the Productivity Commission's inquiry into early childhood education and care (ECEC) on Tuesday that the organisation supports most of the recommendations in their draft report, released late last year, with particular emphasis on the need for sustainable funding for Aboriginal Community Controlled Organisations (ACCO) early years services.

"We reiterate our call for the scrapping of the Childcare Activity Test," Ms Liddle said.

"As [a] step towards this, we are pleased to see the Productivity Commission's draft recommendation for universal access to at least 30 hours of ECEC per week for our children."

The peak body made the submission to the ECEC, supporting the vision of a "universal ECEC system" that would strengthen Indigenous children and families' involvement and engagement with "culturally centred and high-quality education and care and integrated early years services".

"ACCO early years services operate differently to mainstream and for-profit providers," SNAICC said in their submission.

"This requires a separate, dedicated funding model for ACCO ECEC and integrated early years services."

SNAICC submitted a design for a block- and needs-based funding model to meet the entire cost of the service delivery for ACCO integrated early years services, and suggested the Productivity Commission "consider this funding model as the basis for further recommendations regarding supply-side funding in its final report".

Ms Liddle will tell the commission on Tuesday: "Ultimately we should be aiming at a free universal early childhood education and care system that will build a more prosperous, equitable and sustainable future for all Australian children."

"The market-based funding model is failing our most vulnerable children," she said.

"It also perpetuates childcare deserts in many areas where Aboriginal and Torres Strait Islander children live."

The Arnette/Luritja woman echoed these comments in January, when she noted a "one-size-fits-all approach to ECEC" didn't benefit or meet the needs of Indigenous children and families.

An ACCC report on childcare services recently found only 58 per cent of Aboriginal and Torres Strait Islander children were enrolled in childcare in 2022, compared to 70 per cent of all Australian children.

Ms Liddle said closing the gap starts with the improving of outcomes for children. In reality, this means changing systems to what is shown to work in order to best enable Indigenous children to be developmentally prepared when they start school.

SNAICC is also calling for the building and sustaining of a dedicated Aboriginal and Torres Strait Islander early years workforce, noting such a workforce with appropriate training, skills and experience, "is an essential pillar of a thriving and sustainable community controlled early years sector".

"The elements of a strong community-controlled sector are where there is a dedicated and identified Aboriginal and Torres Strait Islander workforce (that complements a range of other professions and expertise) and where people working in community-controlled sectors have wage parity based on workforce modelling commensurate with need," SNAICC submitted.

Ms Liddle said the organisation supported the establishment of an ECEC commission to oversee better coordination and delivery of ECEC policies - as well as providing accountability - but it mustn't displace Indigenous leadership or undermine self-determination.

She said consultation with ACCO's involved in the early years sector had formed SNAICC's policy and funding model options, and they believe many of the ECEC commission functions should remain in the community-controlled sector.

"Part of the failure of previous ECEC policies has been the disconnection from community, how they determine quality and success and whether services effectively meet their needs," she said.

"Ensuring shared decision making and true partnerships with Aboriginal and Torres Strait Islander peoples will set our children, families and communities up to thrive."