As a result of the two-year-old program, many children who have never seen a dentist before are presenting with decayed teeth requiring holes and extractions, say dentists.

More than a million children – far fewer than the anticipated 3 million – have received care under the  means-tested scheme since it was introduced in 2014. Nearly all those children had been bulk-billed, and 80 per cent were treated by private dentists.

Health Minister Sussan Ley told a meeting of health and dental groups last week that she didn't think the means-tested scheme – designed to reach 3 million children in low- to middle-income families – was an effective use of funds and foreshadowed further changes.

A spokesperson said Ms Ley had been merely pointing out that the "well-funded program wasn't meeting its aim," and that "there may be a better way to target funding".

The spokesperson said tackling dental health issues early was vital, and it could alleviate significant problems and expense later in life.

He said the government was continuing to work on dental health reforms, and more details were expected in coming months.

The federal president of the Australian Dental Association Rick Olive has urged families to lobby local representatives to keep the scheme.

"I am very concerned that the Child Dental Benefit Schedule [the scheme] is facing the axe," Dr Olive said.

He urged families to take their children to the dentist before it was too late.

"What I have to say to people who are eligible, and if they haven't been to the dentist, they better go and make an appointment with their dentist because likely from July 1, the scheme won't exist."

The scheme provides children with up to $1000 in dental treatment every two years. Only families receiving government benefits, such as Family Tax Benefit Part A, are eligible.

An Auditor-General's report found only 30 per cent of eligible children had used the scheme so far, resulting in a "significant underspend of allocated funding".  Only $433 million of the $736 million budgeted for the first 18 months from January 2014 had been spent.

It urged the Health Department to review the reasons for the low uptake, which many attribute to the government's lack of advertising.

Tony McBride, the chair of the Australian Health Care Reform Alliance,  said the minister had appeared sympathetic to those requiring dental care. He feared she couldn't win the battle in cabinet for ongoing funding, and the decline in dental funding would continue.

"I'm particularly concerned about the child dental scheme because it is about early intervention. It is already a means-tested scheme so it is targeted to those families from average income and down, those currently least able to afford dental care."

The out-of-pocket cost for dental care was four times higher than it was for average health care, and waiting lists had been starting to grow for public dental clinics.

Dr Christine Said, a dentist with Pacific Smiles in Penrith, said many families were surprised to discover that eligible families could get up to $1000 in free dental care for children.

"It is a good scheme and should be broadened to include more things. It  is bringing kids in for the first time and getting things done," she said.

"Many are nine to 10, and that's quite old for a first time visit," she said.

Often they have lots of holes and teeth that need pulling out, which makes things worse – and risked creating a fear of the dentist, she said.

The scheme was a Labour Party initiative, which started operating soon after the Coalition was elected.