The Queensland government has announced an inquiry into the state's child protection system to uncover the "failures" after a new report found alarming rates of abuse and neglect.

The government said on Sunday that former Federal Court judge Paul Anastassiou KC will lead the 17-month inquiry. It argued that they will take steps "others have been afraid to take, because it is the right thing to do".

Indigenous children and young people are placed in out-of-home care (OOHC) in Queensland at 9.3 times the rate of their non-Indigenous counterparts, and there have been multiple reports of sexual exploitation in residential care facilities.

A 2024 Census of children in care found 11 per cent had been sexually abused, 46 per cent had been physically abused, whilst more than two-thirds had been exposed to domestic violence and had experienced three or more types of abuse.

83 per cent had suffered emotional abuse, and 88 per cent had been neglected.

Despite his government introducing laws which experts say punish children with vulnerable needs by placing them in adult prison facilities, Queensland Premier David Crisafulli said the inquiry was vital in reforming the system for the sake of the whole community.

"There is no coincidence that we have a broken child safety system and a youth crime crisis in this state, and we are determined to take action on both," he said.

Of the 12,497 children in OOHC, 6,112 are placed in kinship care, or with someone related or known to the family; 4,173 live with foster carers; and 2,212 are in residential care - an increase of more than 1500 since December 2015.

Child Safety Minister Amanda Camm said the "extraordinary step of calling a Commission of Inquiry was necessary to unpack the mess left by the former Labor government".

"This is about a generation of children that I believe through the information that I have uncovered has been failed by a broken child safety system," she said on Sunday.

"The Commission will also take a wider look at the department to understand case management practices and case work oversight to ensure vulnerable children are receiving appropriate care."

Abolitionist group the National Network of Formerly Incarcerated Women and Girls said they welcomed the inquiry, but called on it not to make the same mistakes as other investigations into the system in the past.

"For decades, investigations, reviews and parliamentary committees have exposed how so-called 'child protection' tears children—especially Aboriginal and Torres Strait Islander children—from family, Country and culture, funnels them into residential care, and too often pipelines them straight into children's prisons," member Tabitha Lean said.

"Another inquiry that stops at recommendations without re-imagining the entire architecture of 'family policing' would be a moral failure."

Chief executive of PeakCare, Tom Allsop, said on Sunday that whilst the inquiry was welcomed, the problems in the system were well known.

"We have never known more about what is needed to keep children safe, to prevent harm, and how best to respond when harm does occur," he said.

"I'm confident it will quickly become clear that the challenges in Queensland are not a result of the absence of knowing what is needed to create a better care system; it is an enduring and entrenched lack of meaningful action on the things we know will make the biggest difference."

The government says the cost of residential care has blown over the past decade, from $200 million in 2014/15 to $1.12 billion this financial year.

They placed the blame on the previous government, arguing Labor created a "billion-dollar" residential care industry which has "traumatised children and devastated communities in its wake".

"Their egregious lack of oversight allowed this to happen," Ms Camm said.

"It is clear the former Labor Government did not care about vulnerable children and had no regard for whether child safety investigations' timeframes were met. The former government failed in their duty to staff frontline officers appropriately and in doing so have put countless vulnerable children at risk over the past decade."

Of one audited company revealed to have paid $5.25 million of dividends to three shareholders over the past financial year, Ms Camm said: "That is a company profiting from vulnerable children. That is a company that has taken advantage of a broken system."