Australia's indigenous leaders have accused Prime Minister Malcolm Turnbull's government of "humiliating" them by refusing to establish an indigenous advisory body to parliament.

Prime Minister (PM) Malcolm Turnbull on Sunday ruled out supporting a referendum on enshrining the body in the constitution.

The advisory body proposal was first agreed to by delegates from 250 indigenous communities under 2017's historic Uluru Statement.

Speaking at the annual Garma Festival on Sunday night, award-winning author Richard Flanagan accused the government of lacking courage.

"The Uluru Statement was a historic moment for our nation, by refusing it the Turnbull Government chose to write itself out of history," Flanagan said.

"The effort it demanded of Canberra was perhaps too large -- it demanded it imagine the country anew, stronger, richer. It required people who knew a life of the mind and a life of the soul.

"A Government that claims to be of good heart to Indigenous Australia publicly humiliated a generation of great black leaders."

A parliamentary inquiry has been launched to consult with indigenous leaders and identify a viable alternative to the advisory body.

Turnbull said he would consider any outcome of the inquiry but said his preference was for more indigenous Australians to be elected to parliament.

Andrea Mason, chief executive of the Ngaanyatjarra, Pitjantjatjara and Yankunytjatjara (NPY) Women's Council and one of Turnbull's top advisers on indigenous issues, said that the last decade of indigenous affairs had been "wasted."

"It's created a lot of disappointment, because there was opportunity to do it better ... we haven't been able to have the right goals and targets," she told the Australian Broadcasting Corporation (ABC).

"A representative body could have provided high-level advice to that refresh.

"We have to galvanise Aboriginal and Torres Strait Islander people because we don't have a representative body."