Independent Senator Lidia Thorpe has called on the federal government to fund universal access to therapeutic bail support, mirroring calls from more than 90 legal, human rights and Indigenous organisations in an open letter this week.

The Senator's calls come as the Victorian government announced a backflip on their bail changes made in the wake of the death of Indigenous woman Veronica Nelson, a decision widely derided as punitive and caving into a campaign of fear from conservative media, the police union and some social media influencers.

They will see bail removed as a last resort for alleged youth offenders, a tenet of the United Nations Conventions of the Rights of the Child which Australia has ratified, as well as a recommendation from the Royal Commission into Aboriginal Deaths in Custody (RCIADIC).

In its place, community safety will become the "overarching principle" for magistrates and judges when deciding on bail applications for children and adults.

In a letter addressed to the Minister for Indigenous Australians, Malarndirri McCarthy, along with Attorney-General Mark Dreyfus and Treasurer Jim Chalmers, Senator Thorpe called for an "urgent priority budget request for nationally funded, universal access to therapeutic bail support and supervision".

She said access to bail "saved lives," and noted a "targeted investment in this budget will also lead to substantial savings by reducing incarceration costs, improving community safety and reducing strain on the legal sector and court system".

A report from the Productivity Commission last week found the Closing the Gap agreement on both youth and adult incarceration rates was going backwards. Victorian Premier Jacinta Allan has admitted the new bail laws will see more people - including children as young as 12 - held on remand.

Currently, 46 per cent of people incarcerated in Victoria are unsentenced. Nationally the rate is above 40 per cent.

In NSW, new laws have increased the number of children being incarcerated - a fact highlighted by Premier Chris Minns. In Queensland, laws allowing children as young as ten to be housed in adult watch houses have seen children being given tents when they leave detention by officials due to a lack of appropriate housing.

Corrective services across the country now cost the taxpayer more than six billion dollars annually, up more than three per cent from the last financial year.

"Around the country, we're seeing state and territory governments make it harder for people, including children as young as ten, to receive bail," Senator Thorpe said.

"Meanwhile these governments are totally failing to invest in the proven solutions that support people to avoid reoffending and make communities safer."

In a statement to National Indigenous Times last week, Senator McCarthy said the Albanese Government is "committed to working with states and territories to prevent First Nations youths and adults coming into contact with the justice system".

"State and Territory Governments have responsibility for the criminal justice system within their jurisdictions, including policing and corrections," Senator McCarthy said.

"The National Agreement on Closing the Gap was signed by all states and territories, and they need to back up their commitment with action to achieve the targets and deliver on the Priority Reforms in their jurisdictions."

On Monday, the Victorian Aboriginal Legal Service (VALS), along with 91 representatives of Aboriginal Community-Controlled Organisations (ACCOs), community services, family violence and legal sectors called for intensive bail supervision and support, including Indigenous-led models.

They also called for Aboriginal-led therapeutic and specialist family violence supports and services, including access to legal supports that are based within communities.

"All Victorians are let down when successive governments make bad investment and policy decisions that remove essential supports which address the underlying causes of offending behaviour," the letter said.

"Needlessly remanding women and children in prison for days, weeks and months without necessary supports does not lead to greater community safety – it does the exact opposite."

Senator Thorpe said it was "unacceptable" that those who get bail were not being supported to avoid reoffending. She said they are often "bailed back into homelessness" or placed into "unsafe and unstable circumstances".

"We see high rates of reoffending rates among a small group of marginalised young people because governments are doing so little to support them to get on track," she said.

The new bail laws passed the lower house of parliament on Monday and are expected to pass with the support of the opposition this week.