The Albanese government is working on plans to phase in a flat daily fee for childcare to avoid overwhelming the system with a flood of new enrolments, as it seeks a breakout issue to help it secure a second term in office.

In a direct repudiation of the Productivity Commission’s recent recommendation to top up the $12.7 billion a year in subsidies by another $4.7 billion, the government is instead pursuing the more expensive flat-fee option as part of its pitch to deliver universal childcare.