A social justice campaigner has called the separation of Indigenous children from their families a national crime, after a new report warned that the number of children affected is escalating.

Key points: Report finds Aboriginal children 10 times more likely to be in state care

Report finds Aboriginal children 10 times more likely to be in state care Warning number of Aboriginal children in care could triple in 20 years

Warning number of Aboriginal children in care could triple in 20 years Calls for more Aboriginal children to be returned to their families

"It's a national crime, it's not a national crisis," Tauto Sansbury, who sits on a child protection advisory committee within South Australia's Aboriginal Legal Rights Movement, told 7.30.

WARNING: Aboriginal and Torres Strait Islanders are advised that this story contains images of people who are now deceased.

The report by the Indigenous advocacy group Family Matters said Aboriginal children are about 10 times more likely to come into state care than non-Indigenous children.

The organisation's co-chair, Natalie Lewis, believes the figures are set to worsen if there is not urgent action from all levels of government.

"If we don't do anything, that number is going to triple within the next 20 years," she told 7.30.

"We're talking about massive numbers of Aboriginal children who are growing up disconnected from their families, from their communities and culture and the systems that they're growing up in aren't producing better outcomes."

It has been 20 years since the release of the landmark Bringing them Home report, which brought public and political attention to the impact of the Stolen Generations.

Ms Lewis believed the over-representation of Indigenous children in state care could create another generation of trauma.

"While the policy setting is quite different than the time of the Stolen Generations, the impact on children and families is just as tragic," she said.

The Family Matters report argues the child protection system is too reactive with less than $1 in every $5 invested in support services.

"It's a national crime that's being committed against us," Mr Sansbury said.

"They've got a process of taking children away but they don't know how to return children to families.

"Too many non-Aboriginal people attending Aboriginal issues."

'The best place for a child is with its family'

Heidi Singh was given up to a foster family just days after she was born. ( Source: Facebook )

Heidi Singh is one of the children who did not make it through the system.

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On the first day of an inquest into her suspected suicide, her life was summed up as "tragic from the moment of conception and continued right up until her death".

Heidi was born with foetal alcohol syndrome. Her homeless mother gave her up to a foster family just days after giving birth.

The separation would take its toll throughout Heidi's short life as she struggled with mental health issues.

Mr Sansbury said Heidi's death at 14 was tragic and authorities failed her.

"Heidi should have been going to school," he said.

"Heidi should have had a better life and she should have had a better future, but Heidi's got no future now.

"It doesn't matter if you're Aboriginal or non-Aboriginal, the best place for a child is with its family."

Tauto Sansbury says the best place for children is with their family. ( ABC News: Angelique Donnellan )

More Indigenous legal guardians

Victoria has recognised Aboriginal groups should have more say in the care of Indigenous children.

In a Australian first, the State Government is handing over case management for young people in state care to local Indigenous organisations.

Victorian Minister for Families and Children, Jenny Mikakos, said the program, known as section 18, would be progressively rolled out after a successful trial.

"What we're doing is in the spirit of self-determination, ensuring that Aboriginal people determine the futures of Aboriginal children," she told 7.30.

"Transferring legal guardianship, this has occurred in Canada, in parts of the US. It's important we try that here in Victoria.

"About half of the children that participated in the pilot were able to be reunified back to family.

"That's a very significant finding."

'Children should be returned to their families'

lMerinda (l) and Sophie (r) with their mother (c) and the rest of their family. ( Supplied: Sophie Dryden )

In 2014, Sophie Dryden was chosen to take part in the trial, with the Victorian Aboriginal Child Care Agency (VACCA) helping reunite her with her mother.

She had been in state care since the age of three.

"VACCA helped me go live with my mum," Ms Dryden told 7.30.

"When I was under the guardianship order with DHHS (Department of Health and Human Services), I wasn't allowed to live with my mum."

Her sister Merinda also grew up in out of home care. She did not take part in the trial.

"Watching Sophie living with Mum and watching her evolve as a teenager … I can see what a great opportunity it was for my sister to be able to build that relationship with our mum that we didn't have [growing up], " she said.

Their mother has since died.

The sisters said living in different foster homes and going to many different schools made life hard when they were younger.

"People that work with DHHS, they should really listen to the children's voices, because at the end of the day we're the ones who suffer the pain and moving around all the time," Ms Dryden said.

"The priority is that the children and young person should be returned back to their families," Merinda said.

"Because moving from one placement to another, it's the worst thing you can do to a young person."