A new research report from Victoria University's Mitchell Institute has revealed that about 9 million Australians are living in childcare 'deserts', with a ratio of more than three children to one childcare space.

The results show a stark contrast between regional Victoria and outer Melbourne, to affluent inner-city suburbs of Melbourne.

Federation University researcher Dr Cathy Tischler said the report highlighted the restrictive nature of childcare funding for regional areas such as the Wimmera.

"We are aware that there are some significant limitations around the availability of childcare in various parts of the region," she said.

"We know in smaller communities, it is not just economically viable to develop a childcare facility with long daycare. We need to be more creative on how we manage that in the region."

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In the Grampians region, the report has found 2.63 children per singular childcare space, with 39.5 per cent of the population living in a childcare desert.

Horsham recorded 2.59 children per childcare space, and Warracknabeal recorded 6.8 children per availability.

The report follows research conducted by Dr Tischler which looked at childcare market shortfalls in the Wimmera and Southern Mallee.

Dr Tichler's report, Unlocking Aspiration, Outcomes and Equity by unpacking Childcare Issues in the Wimmera Southern Mallee, found a 'market failure' of childcare in parts of the region, with no responsible governing body to provide the service when it occurs.

"I thought the Victoria University report was a really good reinforcement of some of the things we have been saying for a while around the way childcare funding is structured," she said.

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"I think we have added challenges out here around fluctuations of numbers of children to go through a childcare system from year to year.

"The fund model that currently exists doesn't allow for those fluctuations to maintain a viable service."

Yarriambiack Shire Council was one of the municipalities found to be lacking in childcare options, with Warracknabeal recording 6.8 children per childcare space.

No long day childcare service was available in the towns of Rupanyup, Murtoa and Minyip, resulting in parents having to drive into Horsham to access the service.

At the its January meeting, the council approved a forward capital commitment of $400,000 in the 2022/23 Budget to apply for the Building Better Regions Round 6 funding, for the construction of a 30-place childcare centre in Murtoa to service the Dunmunkle Ward.

Yarriambiack acting chief executive Tammy Smith said the council was aware of the issue, and believed the provision of childcare was a critical component in the growth of the region.

"Childcare is having a severe impact on our resident's ability to work, particularly our female workforce," she said.

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"The Mitchell Institute Report has highlighted the challenge that all rural communities face when it comes to having adequate childcare services. Childcare is integral in attracting and retaining a ready and willing workforce that is needed for economic growth in the region.

"Council is currently completing the development of the three year old Warracknabeal kindergarten building which will assist in servicing the needs of our youngest residents and their parents, but will not address the childcare issues faced throughout our shire."

Lead author of the report Dr Peter Hurley said the research showed providers were not only establishing services where there was greater demand, but where they were likely to make greater profits.

"Unlike schools, the early learning sector is made up of for-profit businesses and not-for-profit providers," he said.

"Our research shows that the most expensive childcare in Australian cities is also in suburbs with more childcare places, suggesting there is an incentive for providers to open in wealthier areas where families can afford to pay higher fees.

"For many regional towns, Australia's policy approach to early learning results in a complete absence of provision, especially for towns with a population of less than 1500 people."

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