Centre Alliance MP Rebekha Sharkie tabled a bill in federal parliament on Monday calling on the government to raise the age of criminal responsibility in line with the international average.
At present in Australia, the age of criminal responsibility is set at 10 years old, with "rebuttable presumption", or presumption of innocence, until the age of 14.
The age of criminal responsibility in most European countries is between 14 and 16 years of age, while in others such as China, Russia, Japan and Sierra Leone, it is 14.
Aboriginal and Torres Strait Islander children are disproportionately affected by the law, being 23 times more likely to be locked up than non-Indigenous children.
"Children should be in classrooms, they should not be in custody. The Justice Reinvestment program working in Bourke NSW has proven that prison need not be a rite of passage for children," Ms Sharkie told the parliament.
She also made an economic argument using data from the Productivity Commission, urging the government to consider investing in community-based alternatives, which had been successful in lowering recidivism rates.
"The [Productivity] Commission found that the average cost of community-based supervision across the states and territories in the 2017-18 was $164 per day per young person. The average cost of detention-based supervision per young person per day was $1055," Ms Sharkie said.
"An average cost of holding one child for one year is over half a million dollars. If we times that by the 600, being the number of 10 - 13 year olds detained, it comes in at $308 million."
According to modelling by Price Waterhouse Cooper's Indigenous Consulting branch, the cost of Indigenous incarceration is expected to grow to $19.8 billion over the next 20 years.
If community based solutions were supported, Ms Sharkie said the government would be looking at a saving of over $10 billion.
The Bill has received the support of crossbenchers, including Zali Steggall MP who seconded the bill, Senator Jacqui Lambie, Andrew Wilkie MP, Senator Rex Patrick, Adam Bandt MP, and Dr Helen Haynes MP.
On Monday they fronted the media along with representatives from Amnesty International, Change the Record and the Law Council of Australia.
"We believe that raising the age of criminal responsibility is a great start to actually reducing incarceration rates for Aboriginal and Torres Strait Islander children," Change the Record CEO Cheryl Axelby said.
“We need to see more investment in this space and again I want to commend the leadership that's being portrayed today. We also call upon the Commonwealth Government to take heed and support this cause.”