Children will struggle to meet their learning potential if a proposal to water down educational standards in early childhood is adopted, experts warn.

As part of its inquiry into creating a more sustainable childcare system, the Productivity Commission recommended lowering qualifications for staff who work with children under three.

Childcare workers say children won't meet their potential if their carers aren't properly qualified. Credit:Glenn Hunt

But leaders in the sector rejected the proposal, citing evidence that quality early childhood education provided a strong foundation for lifelong learning.

Leanne Gibbs, chief executive officer of Community Child Care Co-operative (NSW), said scaling back qualifications for staff who work with younger children was simply a cost-cutting measure.