In fact, almost 80 per cent of Indigenous children in the Territory who have been removed from their families are living in non-kinship care, Ms Hollands said.
This was in response to the coalition's newly appointed Indigenous Australians spokeswoman senator Jacinta Price claiming NT authorities were returning fostered Aboriginal children to abusive homes.
Ms Hollonds said she had not seen the evidence behind the claim, noting 22 per cent of Indigenous children in out-of-home care had been placed with relatives or people known to them.
"We want to make sure that the cultural connections are strong, but this is the balancing act that we have to undertake to make sure that the whole child's needs are looked after, but we must never compromise safety," she told ABC radio on Wednesday.
Ms Hollonds said she had over the past six months requested a meeting with Senator Price, and hoped that could take place following the NT senator's promotion to the frontbench.
She said if a child who was removed was then placed in an unsafe situation, that would be an "error" worthy of an investigation.
The coalition is pushing for a royal commission into child sexual abuse in the NT.
Speaking to issues of violence and alcoholism in the NT, Prime Minister Anthony Albanese said all levels of government would continue to work with local communities.
"Some of these issues are intergenerational, they've been around for a long period of time and we need to do better," he told 2SM Sydney radio.
"All governments have not done as well as we should have when it comes to these issues."
Mr Albanese said the government introduced a $250 million Central Australia plan to improve areas including community services work on employment and criminal justice.
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