Olsen grew up in a small country town in New Zealand and was educated there. She worked as a radio producer for Radio Television Hong Kong until 1985. Olsen then came to Australia where she worked in documentary film. She produced the three-part television series Riding the Tiger, and the documentary Hephzibah which won the AFI Best Documentary and the Silver Wolf Award for Best Documentary in Amsterdam. Olsen has been living in Sydney.
Based on real life events that occurred in 1931, Rabbit-Proof Fence is the story of three mixed-race Aboriginal children who are forcibly abducted from their mothers by the Western Australian government. Molly (aged fourteen), her sister Daisy (aged eight), and their cousin Gracie (aged ten) are taken from their homes at Jigalong, situated in the Pilbara region of Western Australia, at the orders of the Protector of Aborigines, A.O. Neville, and sent to an institution at Moore River to be educated and trained as domestic servants. After a few days, Molly leads the other two girls in an escape. What ensues is an epic journey that tests the girls' will to survive and their hope of finding the rabbit-proof fence to guide them home.
Although they are pursued by the institution's Aboriginal tracker and the police, Molly knows enough about bush craft to help them hide their tracks. They head east in search of the world's longest fence - built to keep rabbits out - because Molly knows that this will lead them back to Jigalong. Over the course of nine weeks, the girls walk almost 2,400 kilometres before Gracie is captured attempting to catch a train. Molly and Daisy avoid capture but eventually collapse from exhaustion on the saltpans not far from Jigalong. When they wake, they see the spirit bird, an eagle, flying overhead. Its significance gives the girls the extra energy they need and they are able to make it back to their home.