"Moving towards 100 per cent qualified teachers in early childhood education centres and improving adult:child ratios are among some of the key proposals for change put forward by the sector and experts," Hipkins said.
The report said the adult:child ratios for children under three compare unfavourably with evidence-based recommendations and with ratios in similar OECD countries.
At the moment, the adult to child ratio for children younger than 2 is 1:5 and is 1:10 for 2 year olds and over.
Hipkins is proposing that be lifted to 1:4 for children younger than 2, 1:5 for 2 year olds and 1:10 for 3 years plus.
This change would be implemented in stages, beginning with higher funding rates to encourage the new ratio for under 2 year olds.
The Cabinet paper said: "Incentivising adult:child ratios for those under 2 to a ratio of 1:4 could have a fiscal impact of approximately $35 million per annum. This would rise to approximately $140 million per annum to include an incentive of a ratio of 1:5 for 2 year old."
"For the remainder of the recommendations Ministry officials estimate the cost could add
another approximately $170 million across the forecast period if all the options were to be progressed," it said.
"This Government wants New Zealand to be the best place in the world to be a child, and an important part of that is giving every child the best early learning experience."
He said the plan aimed to focus on the quality of early learning.
The report also proposed increasing the number of staff who are qualified in teacher-led, centre-based services from the current 50 per cent, to 100 per cent after 2022.
Teachers' salaries and conditions will also be looked at, the report said.
"It is proposed to develop a mechanism for the Government to support more consistent and improved teacher salaries and conditions in the early learning sector," the report said.
"This would also help services with a high number of children from disadvantaged backgrounds to attract capable and experienced teachers."
There is also a focus on early learning and the report proposed that the Ministry of Education contracts the development of "innovation hubs".
"These are visualised as places where services could access innovation expertise and research partners to enable practitioner-led innovation and research," the report said.
Hipkins said all the evidence shows that early learning gives children a head start in life, improves their wellbeing and contributes to a happy safe childhood – "but only if it's high quality".
"Participation in early learning has grown in recent years, but this doesn't mean that all children have access to high quality learning opportunities."
In April, Hipkins set up a Ministerial Advisory Group and a Reference Group to work on the plan with the sector and the Ministry of Education, focusing on quality, equity, and choice.
National's early childhood education spokeswoman Nicola Willis said she welcomed the plan but questions around funding remain.
"The Government must assure parents that these proposals won't result in big fee hikes. Many families are already struggling with the growing cost of living. They will be nervous about moves that could increase early childhood fees."
She called on the Government to guarantee the plan won't result in increased fees for families.
Key proposals for change include:
• moving towards a 100 per cent qualified teacher workforce in early childhood education centres
• improving the adult:child ratios for babies and toddlers
• increasing the consistency and levels of teacher salaries and conditions across the sector
• a more planned approach to establishing new services, greater support and increased monitoring.
Hipkins said the plan needed a staged approach to allow time for the sector to respond to the changes and additional workforce demands.
Consultation will include an online survey as well as a series of hui around the country.
