Thousands of child sexual abuse victims have been offered the prospect of financial compensation for their treatment at the hands of churches, schools and other institutions.
The royal commission into child sexual abuse will be asked to report on what institutions and governments should do to address the past and future abuse of children. This could include forcing institutions to offer redress, having crimes referred for prosecution, and offering support services.
Announcing the terms of reference, the Prime Minister, Julia Gillard, said Australia must never again avert its eyes from the ''evil and horrible'' spectre of child sexual abuse.
''What I think is so confronting about much of what is in the public domain now is the sense that there were systemic issues, and that there were eyes averted and children left in harm's way when changes could have been made and issues of abuse addressed. We've got to learn from that, so we do better in the future.''
She said the commission would focus solely on the sexual abuse of children within organisations and institutions, including police, schools, sporting clubs, orphanages, foster care, and religious organisations.
''It will not deal with child sexual abuse in the family [and] it will also not deal with abuse of children which is not associated with child sexual abuse,'' she said.
The commission will report on ways that children in institutions can be better protected and identify the impediments that prevent children reporting abuse.
A former president of the Australian Law Reform Commission, David Weisbrot, said the bill for the inquiry would probably exceed the $100 million cost of the Victorian royal commission into the 2009 bushfires.
The commission will be led by Justice Peter McClellan, the Chief Judge at Common Law of the NSW Supreme Court. The other commissioners are the former Queensland police commissioner Bob Atkinson; Justice Jennifer Coate; Robert Fitzgerald, of the Productivity Commission; Professor Helen Milroy, and the former West Australian senator Andrew Murray.
The commissioners will meet for the first time on Wednesday.
They will be appointed for three years and provide an interim report within 18 months. The terms of reference give the commission an end date of December 31, 2015, but Ms Gillard said that could be extended.
When Parliament resumes next month the government will introduce legislation to allow the commissioners to hear cases individually, rather than in concert.
The only other country to have held such a wide-ranging inquiry into institutionalised abuse was Ireland.
Ms Gillard announced the commission in November after scores of reports of sexual abuse in the Catholic Church and allegations of institutionalised cover-ups. The government came under pressure to broaden it beyond the Catholic Church.
The Attorney-General, Nicola Roxon, said the inquiry would have ''far-reaching powers'' that could allow it to override confidentiality agreements made in settlements with victims, or to issue immunity from prosecution. But the public needed to moderate expectations.
''This royal commission is not a police force; it is not a prosecuting body.'' She said if anyone had an allegation about child sexual abuse, they should take it to the police. And while the inquiry does not have the power to prosecute individuals, the government will ensure allegations of sexual abuse raised by the commission can be investigated and, if proved, prosecuted.
GUIDE TO THE ROYAL COMMISSION
Why is the government holding a royal commission on child sex abuse?
The inquiry was triggered by revelations of child sex abuse in institutions, such as churches, and evidence that the abuse had been covered up or ignored, the Prime Minister says. The inquiry aims to provide a chance for ''healing'' as victims tell their stories; ways to better keep children safe in institutions; and to ensure abuse is acted on.
Why does it need six commissioners?
The royal commission will deal with a large amount of evidence. Many people will want to give evidence and the commissioners might divide up the task of hearing testimony.
How long is the royal commission going to take?
The deadline is three years. A first report is due mid-next year. But the commissioners could ask for more time.
Can victims of abuse talk to the royal commission?
Victims of child sexual abuse linked to institutions can bring their stories to the inquiry. The royal commission will not look at child sexual abuse outside organisations, such as in the family. Victims of neglect and other types of abuse will not be the inquiry's focus.
Is the royal commission going to investigate every church, sporting club and welfare organisation that has been subject to child abuse allegations?
The commissioners have the power to look at any private, public or non-government organisation involved with children. It has been asked to focus on systemic issues.
Does the royal commission lay charges against people?
The inquiry will not be a police force or prosecuting body, but could set up investigative units to prepare briefs of evidence for police. The Attorney-General, Nicola Roxon, says this material could help police begin prosecutions sooner.
Does it affect the commission of inquiry on child abuse in Newcastle announced by Barry O'Farrell?
Mr O'Farrell has previously said he would reconsider his state-based inquiry if the royal commission was set to look at the same issues. The state investigation may continue but the two inquiries could co-operate to ensure they don't duplicate each other's work.
Who does the royal commission report to?
Its reports are to be provided to the Governor-General.
How much is it going to cost?
The government is yet to reveal the cost but it is likely to add up to tens of millions of dollars. This inquiry has been described as one of the largest royal commissions in Australia's history.