The parents of two children abused by a Catholic priest have told a Victorian inquiry that Australia's most senior Catholic showed a "sociopathic lack of empathy" for their plight.

Anthony and Chrissie Foster had two daughters who were abused by a priest while at primary school in Melbourne's south-east in the late 1980s.

One daughter, Emma, committed suicide, and the other, Katie, developed an alcohol problem and was left seriously disabled after being hit by a car while drunk at the age of 15.

The priest who abused the girls, Father Kevin O'Donnell, was jailed for other child sex crimes in 1995 and died in 1997.

Mr Foster has told the Victorian parliamentary inquiry into child sex abuse that it should be mandatory to report any allegations of abuse to a state authority.

And he hit out at Archbishop of Sydney Cardinal George Pell over his handling of the family's case.

Cardinal Pell was Archbishop of Melbourne at the time.

"We experienced a sociopathic lack of empathy, typifying the attitude and responses of the church hierarchy," Mr Foster said of Cardinal Pell's response.

"There are simple things for us, moral questions about why does Kevin O'Donnell rest in the Catholic church priest crypt at Melbourne Cemetery, and is still honoured? Why is his name still on the plaque at our parish church?

"Very simple things like that point to a much more systemic issue of continued reverence for people who have carried out terrible acts, and continued support for them in a priestly way.

"But we've had no answers about why these things were reported.

Left to right: Emma Foster (6); Aimee Foster (2); mother Chrissie Foster; Katie Foster (4) and father Anthony Foster. Emma and Katie were abused by a Catholic priest from an early age. ( Family supplied: Hell on the Way to Heaven )

"It's all about prevention of scandal for the church, and reduction of financial liability. That's what it's about."

Urging Victorian MPs to "lead the way for the rest of Australia" in implementing "legislative changes to provide justice for past victims and protection for all children", he said it should be mandatory to report abuse allegations to authorities.

"Any person, any person, suspecting the sexual assault of a child, should be required to report that suspicion to a state authority. Any person," Mr Foster said.

He has also called for statutes of limitations to be abolished so that victims are able to seek justice for past crimes.

"There should be no time limit for civil or criminal claims in regard to sexual crimes against children.

"There should be a continuing public education campaign to ensure a high level of awareness of the danger, symptoms, causes, effects and prevention of child sexual assaults.

"The wealth of the church and other organisations must be readily accessible to victims through our legal system. Victorian legislation currently allows the church to segregate its wealth in ways that deny victims access to just compensation.

"We fervently hope you have the strength of character to stand up for the rights of children against the might of the Catholic Church," he added.

Mrs Foster condemned the church for failing to defrock O'Donnell, even after he admitted his crimes.

"Why was it so hard to get a priest [defrocked] for raping children, that he'd pleaded guilty to, for 31 years?" she asked.

"We need honesty, we need truth. This is all we're after, this is all we're fighting for. Because if they were there, maybe this wouldn't have happened to children, maybe this could be prevented in the future."

She's called on the church to take a leading role in addressing abuse claims to restore their moral authority.

"Tell everyone what's happened. Expose themselves ... what they've done in the past to children, how they've covered it up, and maybe then there will be a breath of fresh air and they can recover their name.

"But while they keep covering this up and just minimising and denying things, it's got to be fought."

The head of the parliamentary committee leading the inquiry, Georgie Crozier, says the inquiry will continue its work, despite prime minister Julia Gillard's decision to call a national royal commission into institutionalised sexual abuse.

"At this stage there are many things we do not know yet about the royal commission, in particular its scope, its power and where it will operate, the likely timeframe to establish the commission, or how long it will take," she said.

"In Victoria, we have already undertaken a significant amount of work through this inquiry and this has brought to life important revelations that have influenced the decision to call a royal commission."

She thanked the victims who have made submissions to the inquiry.

"Listening to victims tell their stories allows us to hear firsthand, the impact that child abuse has had, not just on the actual victims themselves, but on their families and those around them that have been ruined by the actions of some and the inaction of others," Ms Crozier said.

"We believe that within a relatively short time frame, not years, we will be in a position to make findings and recommendations," she said.

"In the absence of any details as to how the national royal commission will operate, this committee has agreed to continue its work in accordance with the plans previously determined."

The hearing continues.