Victims holding a vigil outside the Christian Brothers' Treacy Centre in Parkville, Victoria said that state, churches and charities are "as bad as each other" in abandoning responsibility for abuse of state wards, reports The Age.
They carried a coffin, to be inscribed with the name of every state ward who has suffered abuse and died without compensation, the report adds.
The protesters held placards with such sentiments as "abused by the state, betrayed by the government'', ''orphans of the state'' and ''it's not too late to care".
Most of those assembled on The Avenue, all members of the Care Leavers Australia Network (CLAN), have long and bitter experience of abuse - sexual, physical, emotional, psychological.
Leonie Sheedy, the CLAN chief executive, says the network has more than 1000 members from people who grew up in 600 orphanages, church homes and foster homes. She and her six siblings were sent to 26 different institutions during their childhood.
The Australian reports that Human Rights Commission president Catherine Branson has criticised the Gillard government for refusing to take a leadership role on the "forgotten Australians" who were abused as children while in state or church care.
In a letter of support last week to Ms Sheedy, of the CLAN group, Ms Branson said the abuse of children was clearly a human rights violation and governments had an obligation to promote "the physical and psychological recovery" of child victims.
"I express concern that the Commonwealth government has declined to take a leadership role on the issue of redress for these past abuses," Ms Branson said.
She said she had urged Families Minister Jenny Macklin to pursue options through the Council of Australian Governments to establish redress schemes in all states and to ensure those schemes were consistent and inclusive.
At the protest, Ms Sheedy said Australia needed a national reparations fund to overcome the gaps and inequities in state-based funds.
"The feds wash their hands of it and say it's a state issue," Ms Sheedy said.
"But there are a lot of people who have missed out in the state systems.