A royal commission sparked by footage of brutal abuse of boys behind bars in the Northern Territory will look at whether their treatment breached not only the law but Australia's human rights obligations.
And abuse victims could be given compensation for their suffering if newly-appointed commissioner Brian Ross Martin believes they deserve it.
Malcolm Turnbull's cabinet on Thursday approved the terms of reference for the commission, which he ordered following videos of children being stripped, tear-gassed and held in solitary confinement.
The footage aired on the ABC also showed one boy being shackled to a "mechanical device" chair before being left alone for two hours and another being tackled, lifted and hurled across a room.
The royal commission will focus on the failings of child protection and youth detention systems run by the NT government since 2006 while investigating any law or human rights breaches.
The prime minister said Australians had been "shocked and appalled" by the images of mistreatment of children - particularly at the Don Dale detention centre.
"Every child in our justice system must be treated with humanity and respect at all times," he told reporters in Canberra on Thursday.
Justice Martin, the former chief justice of the NT, will look at whether enough was done about two reports in January and August last year of abuse of young people at Don Dale centre.
He'll also investigate whether the NT government should have done more to stop the abuse of children and what role racism had to play in the culture of child protection systems.
"We believe that these terms of reference are both sufficiently focused but, at the same time, sufficiently broad that we'll get tangible outcomes," Senator Brandis told reporters.
Justice Martin pointed out he had the power to recommend compensation to the victims, but Mr Turnbull would not be drawn on whether the thought financial reparation was appropriate.
While revealing Justice Martin as the head of the commission, the prime minister hailed him eminently qualified and praised his understanding of the NT justice system and his familiarity with indigenous people.
Justice Martin maintains there is no conflict of interest in his appointment, despite his prominent former role in the territory's justice system.
"There's never been any suggestion that this sort of treatment was brought to my attention," he said.
The commission will hold a directions hearing on September 6 and report by the end of March, however Justice Martin was confident he'd be granted extra time if needed.
"That is tight when one looks at the breadth of the terms of reference," he told reporters.
"But given some hard work, hopefully we'll meet it."
The federal opposition had been calling for the inquiry to be extended to other states and territories but the prime minister warned a broader royal commission could lose its way.
"A royal commission is most effective when it has clear terms of reference," he said.
Earlier, acting Labor leader Tanya Plibersek said it was extraordinary Mr Turnbull had ruled out the inquiry looking into other states.
She was also "deeply disappointed" that despite the opposition giving bipartisan support to the commission the party had not been consulted properly by the attorney-general.
NT Chief Minister Adam Giles had agreed to the terms of reference, Senator Brandis said.
Aboriginal and Torres Strait Islander social justice commissioner Mick Gooda was pleased the terms of reference included potential human rights breaches.
"We don't see that very often," he told ABC radio on Thursday.
