Katie and Emma Foster's abuser is buried in the Catholic Church crypt at Melbourne Cemetery.
Prime Minister Gillard insists the inquiry -- with the power to compel witnesses, offer indemnities and seize documents -- is not aimed at the Catholic Church.
"This is a Royal Commission which will be looking across religious organizations as well as state-based care and the not-for-profit sector. It is not targeted at any one section or religion," she said.
However, the only religious leader Gillard consulted after she decided on the Royal Commission was the Catholic Archbishop, Cardinal George Pell.
A divisive figure, Cardinal Pell defended himself and his church against claims last week of systemic cover-ups by the church hierarchy.
As calls for a national inquiry grew louder in the wake of explosive claims by a senior police officer that the church was complicit in the crimes by moving offending priests and destroying crucial evidence to stymie prosecutions, Cardinal Pell said the Catholic Church was being disproportionately targeted.
"We have to answer up for what we've done," Cardinal Pell told his congregation on the weekend.
"But any suggestion that we are the only culprit or only community producing culprits is entirely misleading," he preached.
But others disagree.
"This is really an inquiry into the Catholic Church and the cover-up," Foster told CNN.
"It's all the revelations of abuse in the church that brought this to a head. We know there is other sexual abuse, but this has come about because of rampant sexual abuse by Catholic Church clergy," he said.
For Pat Feenan and her son Daniel, the Royal Commission is most certainly about the sins of the Catholic Church and what he sees as the lack of compassion shown to its victims.
"We went through the whole trial with no support from the church," she told CNN.
"The priests supported Fletcher, to see how he was, to pray with him. We were in the same courthouse, and no one came near us. The church community were not encouraged to be mindful of the victim. There were prayers for the priests and not for the victim. That's not fair," she said.
As for the police officer who blew the whistle on both fellow officers and the church for covering up the abuse, the announcement represents an opportunity.
"Now we're going to start listening to the victims and start listening to their families," said Detective Chief Inspector Peter Fox.
"And we're going to start doing something about the problem. The big problem is denial, when you're not prepared to sit down and actually start to acknowledge that there's a problem and look at ways of fixing it," he said.
Gillard said her government will consult with victims' support groups, religious organizations and state and territory governments to determine the Royal Commission's terms of reference.