The inquiry has spent the last two days in Boggabilla and Toomelah, where about 70 people gathered to give evidence yesterday.
Commissioner James Woods yesterday heard evidence from local Aboriginal women of children acting out sexual assaults on other children in schools.
A community worker, who did not want to be identified, told the hearing, "At a very young age, they know about things that they shouldn't and they act out in very inappropriate manners and there is often violence to other children."
The worker says intimidation is used to cover up the problem.
"The children learn from a very young age that it's easier to take it on the chin than to do anything about it," he said.
Evidence was also given yesterday that women lived in fear of men but were too scared to speak out because they were just as scared of "white man's justice".
The community worker said local men were also sometimes a barrier to bringing sex abuse in schools to light.
"Culturally, I do think it has become something that women do protect their men," he said.
"There is a lot of domestic violence. Men often have control of the situation."
Local elders said they were battling the problems but did not have enough support or resources.
Inquiry commissioner James Woods returned to Boggabilla and Toomelah this week for a more in-depth analysis of local problems after visiting earlier this year.
During the first trip, he was told not to drink the water because it was affected by sewage.
This time, there was no water in Toomelah because the pump was broken.
The inquiry is expected to report back to the State Government in September.
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