Labor has said it will not pass budget savings the Government insists are needed to fund a new childcare proposal directing $850 million to childcare for disadvantaged families, children considered at risk and those living in regional or remote parts of Australia.

Of that amount, $327 million would be additional funding, while the remaining money would be re-directed from existing programs.

Social Services Minister Scott Morrison told the ABC's 7.30 program the money would be aimed at struggling families, communities and children vulnerable to abuse.

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Mr Morrison said that while some of the money would come from existing programs, most of the funding for the newly-announced initiative and the Government's broader families package remained contingent on savings currently being blocked by the Senate.

"That is tied to Family Tax Benefit savings that were put forward in last year's budget," he said.

"What we're doing with childcare more broadly, and particularly in this area where the increases in expenditure are going to occur, well, that has to be paid for with other savings."

Labor said it would continue to block cuts to the Family Tax benefit, currently stalled in the Senate, because they are "unfair".

"You can't say to a family on $65,000 with two children, that you're going to take $6,000 off them. That is the real money impact of what this Government wants to do to families. It is not fair and Labor will oppose it," Labor's Families spokeswoman Jenny Macklin told AM.

Ms Macklin said the Government would have to find the budget savings elsewhere.

"I would say to the Government, they found money for other things in this budget, they can find money for vulnerable children without holding families, low and middle income families, to ransom," she said.

Mr Morrison said he would not have phrased what the Government is doing in that way and said the savings are needed in order for families to get the support they need.

"That’s not how I’d put it at all. What we’re doing is, we want to invest more in childcare, to support families to have choices, to stay in work, to be in work, to get in work," Mr Morrison said.

"It’s important, to do that, that we get the savings in place, that keep the budget in balance and keep the choices for families."

The proposed "early childhood safety net" will be split into three components:

An additional childcare subsidy for children at risk, disadvantaged families and those deemed at risk of abuse, worth $156 million

An additional childcare subsidy for children at risk, disadvantaged families and those deemed at risk of abuse, worth $156 million A childcare fund to help set-up and promote childcare centres in disadvantaged communities, low income and rural/regional areas will receive $300 million

A childcare fund to help set-up and promote childcare centres in disadvantaged communities, low income and rural/regional areas will receive $300 million A support program to recruit/train staff and buy equipment for childcare centres is budgeted to receive $400 million

Mr Morrison described the package as "a broad sweep across a whole range of services".

"The Productivity Commission found this service was quite disjointed and we will be tightening it up and putting it into a childcare safety net," the Minister said.

Interest groups cautiously welcome reform

Early Childhood Australia CEO Samantha Page said she was happy to see attention paid to what she described as an "important" area for reform.

"I'm pleased the Government is doing that and being fairly brave, it is difficult," she said.

But Ms Page also wanted to see how much new money was actually involved.

"We need to see that detail to know how much additional money is being put into the system," she said.

Executive director of advocacy group The Parenthood, Jo Briskey, also welcomed the announcement.

"It's great to see those children from disadvantaged families will have greater support to access high-quality early learning and care," she said.

However, Ms Briskey also criticised tying the initiative to a budget measure that remains stalled in the Senate.

"We don't know whether they'll go through," she said, referring to the Family Tax Benefit changes.

The Government wants to cut off Family Tax Benefit Part B when a family's youngest child turns six and freeze all FTB payments for two years, measures that together would save an estimated $4.5 billion over five years.

"It's really disappointing that the Government is essentially planning to rob Peter to pay Paul," Ms Briskey said.

"To say to one group of parents we need to take away your parenting payments to help another group of parents access more affordable childcare, it's simply unfair."

The ABC understands the funding is scheduled to commence in 2016/17, along with the rest of the childcare package.