The Productivity Commission report, titled Aboriginal and Torres Strait Islander Visual Arts and Crafts, found that most Indigenous artists did not see the majority of the money from the art they sold.

The report identified inauthentic Aboriginal arts and crafts as "a pervasive and longstanding problem".

The proposed laws would give traditional owners more control of cultural assets, place conditions on the use of assets, and protect them from misappropriation, such as through legal action.

Prominent Border artist Glennys Briggs, a Taungwurung-Yorta Yorta woman, has been passing on the stories of her family through art.

She has spent a lot of time doing cultural research into her family line in order to pass on her story to her grandchildren.

"People are telling stories that they shouldn't be telling, and taking away the food from an Indigenous artist's mouth by selling products that the artist is trying to produce," Ms Briggs said.

She said there needed to be stronger penalties for those who produced or sold counterfeit art.

"The consumer as well has been hoodwinked into thinking that they're buying a piece of authentic Indigenous art, but they're not," she said.

"There needs to be stronger laws around this."

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Wiradjuri artist, Mick Bogie, who contributed to the Gateway Island cultural trail, said the proposal was "a great step" towards the protection of cultural assets.

"Aboriginal art is not just about pictures, it's about the stories that go within the pictures," he said.

He said "two out of three" Indigenous souvenirs sold in stores that came from overseas were not authentic.

"It misinterprets our culture and denies our people opportunity," Mr Bogie said.

"It makes me feel sad people can be doing these things and getting away with it."

He said he thought more needed to be done so that knock-off products were not sold to unsuspecting tourists.

"A lot of souvenirs are sold to tourists; they don't understand," he said.

"They just think that's what it is, that's Aboriginal style and an Aboriginal souvenir."

Fellow Indigenous artist Treahna Hamm, who is also based in the North East and has practised her art for 40 years, said she had sought permission to tell the stories of her ancestors from elders.

Her story, Myee, about a Yorta Yorta bogong moth spirit, is also featured at the Albury-Wodonga Gateway Island cultural trail.

"As an Aboriginal artist, I don't just go to other countries and paint about that, or take their flag, or do anything like that," she said.

"There is such a protection for that, and we've got a responsibility to tell our stories.

"We can't have that being taken and construed in any other way.

"You have to have permission to be granted to use your cultural knowledge and intellectual copyright."

She said had experienced first-hand having traditional stories "already been taken".

With the opening of the Koori Heritage Trust in Melbourne's Federation Square, Ms Hamm said it was an impetus for people to want to buy genuine Aboriginal products and art.

She is part of the Victorian government's First Peoples Directions Circle, and has strong links with the Burraja Gallery in Wodonga.

"If people really are concerned about products in different areas, there's the Registered Aboriginal Parties," she said.

"That shows, right around the state, the Aboriginal traditional owners who have been reviewed by peers and elders ... with verified connections to country ... and everything they've ever produced."

"It all comes down to the laws which govern the restriction of people who are business owners, who produced and sold fake Aboriginal products in the past."

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