Aboriginal family violence and legal service Djirra have responded to the latest data showing Victoria places Aboriginal children into out-of-home care at 22.5 times the rate of non-Indigenous children, describing it as "creating another stolen generation".

On Wednesday, the latest data from the Productivity Commission found Victoria was removing more children from their families than any other state in the country, and at almost twice the national rate.

Nationally, the out-of-home care (OOHC) rate for Aboriginal and Torres Strait Islander children is 57.2 per 1,000. However, Indigenous children and young people in Victoria were removed and placed into care at a rate of 102.9 per 1,000 Aboriginal and Torres Strait Islander children — 22.5 times that of non-Indigenous children.

Djirra chief executive Antoinette Braybrook told National Indigenous Times the system is not protecting Indigenous children.

"This punitive, unfair system is creating more trauma, distrust, fear, and harm to Aboriginal women and kids across this state," she said.

"These latest numbers are not a surprise to us."

The data, which comes on the eve of National Aboriginal Children's Day, was one of several Closing the Gap targets Australian governments are failing to meet, with only five of the 19 targets considered on track.

The Department of Families, Fairness and Housing (DFFH) told National Indigenous Times Victoria has the highest rate of Indigenous children being placed in kinship care, with a spokesperson noting "80 per cent of children placed with Aboriginal relatives, non-Aboriginal relatives, or with an Aboriginal carer - compared to the national average of 63.4 per cent."

Ms Braybrook noted that "more of Victoria's Aboriginal kids than ever are being taken from their parents as a direct result of systemic racism in this state's child protection and out-of-home care systems".

"This system is not broken. It is doing exactly what it's intended to do – target, blame and punish Aboriginal women by taking our kids," she said.

"And it is literally creating another Stolen Generation."

Indigenous-led organisations in the sector have long argued First Nations children are often removed for societal factors rarely enacted on for non-Indigenous families.

Furthermore, women who are the victims of domestic violence are often wrongly identified as the perpetrators, resulting in child protection becoming involved.

In Victoria, Indigenous women are 45 times more likely to experience family violence – perpetrated by men of all backgrounds - than other women.

"Family violence is the single biggest driver of the vast over-representation of Aboriginal children in out-of-home care," Mr Braybrook said.

In a submission to the parliamentary inquiry into capturing data on family violence perpetrators, Djirra said "up to 58 per cent of women on Community Protection Orders in Victoria have been misidentified as perpetrators".

"Djirra works with women who are blamed and punished for the violence they experience, who have their children taken rather than being supported to escape the violence with their children, and who fear the system more than their abuser," Ms Braybrook said.

The Closing the Gap report does not provide an update on the 2018 baseline of the proportion of Aboriginal and Torres Strait islander females or children who have experienced family violence, with the Productivity Report saying this is because of "concerns with how the data was collected and the potential risk of harm this data collection caused for participants".

Ms Braybrook said the lack of data capture was "completely outrageous," arguing that "you cannot manage what you don't measure," and the reliance on outdated data showed governments didn't take the issue of domestic violence seriously.

She called for every Indigenous woman in Victoria to be within an hour of the type of legal services Djirra offers, and called for the state government to establish and fund a "mandatory system of referring mums and mums-to-be to Djirra for legal advice and representation as soon as a concern about the safety of an Aboriginal child is raised" – recommended by Yoorrook in their 2023 interim report.

Noting their "in principle" support to the system in April, Ms Braybrook questioned the government: "What is the hold up? ... They have got to act more urgently."

"Early legal advice as soon as concern about the safety of an Aboriginal child is raised WILL stop our kids being ripped from their mum's arms and keep mums and children safe and together," she said.