Victoria's Environment Minister has revealed the legal frameworks that enabled land to be taken from Indigenous people excluded First Peoples from the economic benefits those lands produced.

Appearing before the Yoorrook Justice Commission, the Environment Minister Steve Dimopoulos acknowledged royalties agreements were intentionally legislated and designed to effectively exclude Aboriginal people from their share of more than $1.5 billion in land use revenue.

The truth-telling hearings are examining the historical injustices surrounding land, sky, and waters in Victoria and has previously heard from experts in the history of Australian colonisation and dispossession.

On Tuesday, the Minister was asked to view an internal government memo from the early 1990s, which was written to provide information about "issues arising from the Mabo decision".

Writing to the head of the Department of Conservation and Natural Resources, the author of the internal memo argued "it was clear that all Crown grants, most forms of leasing, and many forms of licensing will effectively extinguish Native Title".

"Because of historical circumstances in Victoria, whereby Aboriginal groups were dispossessed and displaced to a very significant degree… claims in Victoria will be difficult to prove," the memo stated, before arguing the Mabo decision would not be of "general significance," despite some claims - "in limited areas" - having the potential to succeed.

Counsel Assisting Sarala Fitzgerald highlighted the Victorian Plantations Corporation Act - which allowed for the granting of licences. She then compared the legislation to the internal memo, written in the months before the legislation was introduced in 1993, and which argued licences over land would "effectively extinguish Native Title".

"Whether by intention or not, there was an awareness that granting a power of that kind would facilitate the extinguishment of Native Title. Do you accept that?" Ms Fitzgerald asked.

"I do," Mr Dimopoulos replied.

"I got an emotional response reading it... How unjust it is. Not only how unjust… [but] how that was not a government for Traditional Owners. It was a government against Traditional Owners."

A clearly exacerbated Commissioner Travis Lovett described the government decision at the time as "disrespectful to say the least".

"How about our people listening…it breaks our hearts," Commissioner Lovett said.

"This isn't going back to the 1840s when the massacres started; this is 1993; this is abuse; this is what our people have continually had to put up with."

Noting the overrepresentation of Indigenous people in the child protection and justice systems, Mr Lovett rhetorically asked: "How can we build intergenerational wealth when we are continually shut out of the system?"

Ms Fitzgerald highlighted figures which showed the state had received $508 million in grazing revenue, and $1.385 billion in sales and royalties from native timber harvesting.

"How much of that revenue has been disturbed to Traditional Owners?" Ms Fitzgerald asked.

"As I understand it, none," Mr Dimopoulos replied.

Asked why this was the case, the Minister said the official answer was the threshold was never met but accepted the "real answer" was that the "threshold was set in a way to exclude Traditional Owners - that's the reality".

He accepted the "power of the state, compared to the power of Traditional Owners, is completely disproportionate", before saying the framework has traditionally always been designed to "disenfranchise" Traditional Owners.

"In that space, there is a lot of catch up to do."

During his appearance, the Minister said he had "gained a deeper understanding of how important connection to Country is for Traditional Owners" since moving into the Environment portfolio last year during the cabinet reshuffle and highlighted the need for more to be done on the uneven playing field.

He said he recognised that the "true nature of the dispossession of land in Victoria" had not been "fully acknowledged or addressed by the State to date".

"The existence of ongoing systemic injustice in relation to land has also not been fully addressed," Mr Dimopoulos said in his opening address.

"I am mindful of the significance of the opportunity to acknowledge and address these matters."

He lauded cultural firefighting, not just from a cultural standpoint, and of the Department of Energy, Environment and Climate Action, he said: "We are land managers…but on land that is not ours".

The hearings continue Wednesday.