Wiradjuri elder Aunty Isabel Reid has backed the proposal, while Aboriginal leader Warren Mundine has criticised the bill.

The Children and Young Persons (Care and Protection) Amendment (Family is Culture Review) Bill would, if passed into law, require NSW Family and Community services to presume "that removing an Aboriginal or Torres Strait Islander child or young person from his or her family causes harm".

The Bill was introduced by departing Greens MLC David Shoebridge to Parliament's upper house in November as a response to Aboriginal children in NSW being 10 times more likely to be taken from their families than non-Indigenous children.

The bill's extra provisions for family services and the Children's Court were designed to lift the threshold for circumstances where Aboriginal Children would be removed from their families.

Aunty Isabel, aged 89, is a member of the Stolen Generation having been taken from her family at the age of 7.

"I think the government should be looking at it more closely. Do we want another Stolen Generation? Because it's out there, it's poking its head up high," she said.

"I don't want that to ever happen again. It's too devastating for the children and the mothers. Mothers still love their children no matter who or where they are. Why don't they close their eyes and think of a white child and how that would feel?"

Aunty Isabel said children should still be removed from a family if that option was the least harmful.

Wagga MP Joe McGirr has co-sponsored the bill for its consideration by NSW Parliament's lower house.

"Currently, 43 per cent of children in out-of-home care are from Aboriginal and Torres Strait Islander communities and when you thin about it, that is extraordinary," Dr McGirr said.

"Given that we have had the apology for the Stolen Generation, we have got a National Sorry Day back in 2007 and now 15 years later we have still got those extraordinary statistics.

"The NSW government commissioned an academic, Megan Davis, to produce a comprehensive report with a series or recommendations on how to address this issue. I understand she is quite a conservative Aboriginal advocate; that report has been available for four or five years and frankly not much has happened."

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Dr McGirr said he and his fellow independent MPs saw the amended legislation as a way to implement those recommendations and do everything possible to keep Aboriginal children with their families or at least within a kinship group to maintain a connection to their culture.

"Even in our local community, this issue is a significant one for Aboriginal and Torres Strait Islander people. It gets raised with me frequently," Dr McGirr said.

Liberal MLC Catherine Cusack told Parliament it was important to show respect to First Nations people, to recognise the mistakes of the past and to address disempowerment but she could not support the bill.

"To say that the powers of the State and the levers available to the State in the management of those cases should be deleted on the basis that a child is Aboriginal is something that I cannot nor will I ever support.

"I understand the good motivation behind the idea, but it is a terrible error to elevate the mistakes we have made in relation to Indigenous Australians ahead of the solutions that we need to find for every child who is in a situation where they are suffering actual abuse and where their lives are at risk."

Aboriginal leader Warren Mundine has also criticised the bill and said the protection and safety of a child should be the first priority.

Family and Community Services recorded that 12 children from all cultural backgrounds were taken into out of home care for every 1000 residents in the Murrumbidgee Local Health District during the 2019-20 financial year.

Mr Shoebridge told Parliament the October 2019 that Professor Davis's Family is Culture report delivered 126 specific recommendations to reform the child protection system for First Nations children.

"However, the Government has stated it will not even begin to consider the systemic reforms-not one of the recommended legislative reforms-until 2024. This is too late," Mr Shoebridge said.

"By then, countless more families will be irrevocably damaged by the system; another generation will be taken. That is plainly unconscionable.

"The trauma of family separation cannot be underestimated. The removal of First Nations children severs cultural, spiritual and family ties, and causes long-lasting trauma that continues for generations."