Since the early 2000s, literacy education has become an area of intense focus in Australian education policy, positioned to have a role in Australia's pursuit of enhanced international competitiveness in the “global knowledge economy”. Policy called for improvements in literacy outcomes, monitored by mandated annual assessments, and policy statements recognised the need to establish solid literacy foundations in early childhood to facilitate learning, and desired improvements, in later years. This article is derived from a larger study that investigated the production and enactment of literacy curriculum policy by early childhood teachers in Australian schools. It focuses on the school level within the State of Western Australia, presenting findings derived from thematic and critical discourse analysis of participant interview and documentary data collected in two case‐study schools. Comparative analysis revealed that literacy curriculum policy processes in both case‐study schools were focused on achieving improved test results in mandated testing regimes. This was impacting upon literacy curriculum in the early childhood years of schooling, in Australia deemed to involve children up to 8 years of age, in many, possibly adverse, ways. These findings may offer insights in other contexts about literacy curriculum policy processes that are focused on enhancing competitive positioning.