A parliamentary inquiry into early childhood education safety said serious concerns had been raised about standards in the sector and whether children were being properly protected.
In its final report handed down on Tuesday, the Liberal-chaired inquiry recommended law enforcement be integrated into child safety reforms.
It made 23 recommendations including more closely aligning police intelligence with working with children checks and the national education register.
The report called for a review of whether penalties for child sexual abuse offences needed to be increased, questioning whether current sentencing measures were a sufficient deterrent.
Access to the National Early Childhood Worker Register should also be expanded to allow childcare employers to conduct more extensive checks of prospective staff, the report said.
The inquiry was set up after Melbourne childcare worker Joshua Dale Brown was charged with dozens of sex offences.
Brown is known to have worked at 24 facilities between 2017 and the time of his arrest.
Inquiry chair Maria Kovacic said police needed greater powers to adequately protect children.
"Paedophiles are actively co-ordinating to target early education and childcare settings," the Liberal senator said in a statement.
"Despite the seriousness of these threats, the government's policy continues to prioritise expansion of the system, effectively pursuing a one-size-fits-all approach without adequately addressing critical safeguarding risks."
Labor senators said the coalition had ignored a significant amount of evidence to the inquiry in support of bipartisan national child safety reforms.
The government instead urged greater co-ordination between the Commonwealth, states and territories to develop a universal early childhood education system.
Childcare Choice co-founder Jen Fleming said the inquiry's findings showed there was no evidence expanding the centre-based model worked.
"This report confirms what families already know - one model of care does not work for every child, every parent or every community," she said.
"For too long, policy has assumed that expanding centre-based care is the solution.
"This report makes clear that assumption is not backed by evidence, and it is not what all families need."
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