Victoria's leading Indigenous legal organisation says new bail laws which came into effect in March this year are already having a positive impact.

It comes as new data shows Aboriginal and/or Torres Strait Islander people on remand (unsentenced) in the state dropped by 14.6 per cent between March and the end of June.

At the end of March, 337 First Nations people were unsentenced in Victorian prisons; by the end of June, this had fallen to 291 people. For all unsentenced incarcerated people in Victoria, the number dropped from 2,299 to 1,994—a 14.3 per cent decrease.

Victorian Aboriginal legal Service (VALS) estimated the reduction of people being kept out of prison without being found guilty of crime is saving around a million dollars a week, based on costs from the Productivity Commission's Australia's Prison Dilemma.

Victoria is the most expensive state to keep someone in jail at $421 a day, or $154,000 a year.

However the overrepresentation of First Nations people in Victoria is still apparent, and while the remand numbers are on target, VALS said the reforms have not yet led to an overall reduction in line with the Closing the Gap targets.

Previous bail laws, described as an "unmitigated disaster", were changed as a direct result of the campaigning of Veronica Nelson's family.

The Gunditjmara, Dja Dja Wurrung, Wiradjuri and Yorta Yorta woman's preventable death on January 2, 2023, came after she experienced "cruel" and "inhumane" treatment.

Bail laws were initially remodelled in 2018 after the Bourke Street massacre to make the threshold for bail much higher.

VALS chief executive, Nerita Waight said the data showed when government listens to Aboriginal people, "everyone benefits and we create a stronger and fairer Victoria".

"Our people knew the bail laws had to change, and they did the hard work to propose evidence-based solutions," Ms Waight said.

"It is great that there are fewer Aboriginal people in Victoria's prisons and VALS will continue working with our communities, governments, and the legal system to end the over incarceration of our people as quickly as possible - and ensure resources are directed towards preventing people from interacting with the justice system."

First Nations groups, along with legal and human rights organisations have long argued for the changed bail laws, which disproportionately impacted First Nations people, especially women.

Even after they were introduced, many said the laws didn't go far enough in adopting the reforms proposed by Ms Nelson's family.

Ms Waight said the government needed to implement Poccum's Law (the nickname of Veronica Nelson) in full, arguing anything less would be a "failure".

The news laws have been bitterly opposed by the Victorian Opposition and members of the Victorian police.

The Age reported in May Victorian Police message boards had used the issue of domestic violence to weaponise the bail debate, with one officer stating: "In a time when women are being killed by their current or ex-partner at an alarming rate, how can lawmakers or those in positions of power change legislation and think this is in any way acceptable[?]"

Chief executive of Aboriginal family violence prevention service Djirra, Antoinette Braybrook, previously told National Indigenous Times: "Changes to Victorian bail laws in 2018 caused mass incarceration of Aboriginal people, with Aboriginal women vastly and disproportionately affected."

"In our work, we continue to see Aboriginal women misidentified as the perpetrators of violence, criminalised, and their children taken," the Kuku Yalanji woman said.

VALS accused the Victorian opposition, who last week were accused of stoking "nasty racial division" in their criticism of cultural heritage legislation, of spreading misinformation about the bail laws being more advantageous to Aboriginal people "in the hopes that they will benefit politically".

Shadow attorney-general Michael O'Brien took to social media last month to argue the "weakening of bail laws" has made it "much easier for Aboriginal people to obtain bail".

"So it was predictable that some criminals would exploit this by claiming Aboriginal heritage when they have none," Mr O'Brien said.

Ms Waight, who previously highlighted 'fear mongering' from the police around the issue of youth crime, often publicly elevated in conservative media outlets, said "certain media outlets and politicians" were spreading misinformation for political benefit.

"Aboriginal people are not political footballs to be bandied about at will," Ms Waight said.

"We are strong and proud peoples who work hard to create a better Victoria. There should be consequences for people and parties who choose to re-enliven racial stereotypes and biases."