Closing the Gap Review 2026

I, the Hon Jim Chalmers MP, Treasurer, pursuant to Parts 2 and 4 of the Productivity Commission Act 1998, hereby request that the Productivity Commission undertake a review of progress on Closing
the Gap.

Background

The goal of the National Agreement on Closing the Gap (the Agreement) is to overcome the entrenched inequality faced by too many Aboriginal and Torres Strait Islander people so that their
life outcomes are equal to all Australians. The Agreement was developed in partnership between
Aboriginal and Torres Strait Islander representatives and all Australian governments and commits governments to working in full and genuine partnership with Aboriginal and Torres Strait Islander people in developing and implementing policies that impact First Nations people and communities and aim to close the gap.

The Agreement is built around four Priority Reform areas and 17 socioeconomic outcomes. The socioeconomic targets measure the life experiences of Aboriginal and Torres Strait Islander people.

The Priority Reform outcomes are:

• Strengthening and establishing formal partnerships and shared decision-making
• Building the Aboriginal and Torres Strait Islander community-controlled sector
• Transforming government organisations so they work better for Aboriginal and Torres Strait
  Islander people
• Improving and sharing access to data and information to enable Aboriginal and Torres Strait
  Islander communities to make informed decisions.

Parties to the Agreement agreed that the Productivity Commission will undertake a comprehensive review of progress every three years. The review will provide an analysis of progress on Closing the Gap against the priority reforms, targets, indicators and trajectories, and examine the factors contributing to progress, including by drawing on evaluation and other evidence. Parties have committed to undertaking actions if the review indicates that achievement of any of the targets that are set out in the Agreement is not on track.

Scope of the review

The review will assess how effectively the Agreement is supporting improved life outcomes for Aboriginal and Torres Strait Islander peoples. In undertaking the review, the Productivity Commission should:

• Have regard to all aspects of the Agreement and consider the progress, implementation efforts and annual reports of all parties, including jurisdictional progress by the Commonwealth and states and territories
• Assess progress against the four Priority Reform areas and 17 socioeconomic outcomes, including identifying successful approaches, partnerships and delivery models that have demonstrated positive impact
• Draw on available evidence and evaluation findings, to assess impact, deliverables and outcomes, and progress towards developing measures for the Priority Reforms targets and indicators and outstanding data under socioeconomic targets
• Assess whether commitments under the Agreement that relate to prioritising and reporting on funding and resourcing to First Nations community-controlled sectors are being met, and
  whether they are driving changes in the way investments are made and improved outcomes against the Priority Reforms
• Assess whether new and existing funding – both dedicated and mainstream – is being effectively mobilised to achieve the objectives of the Agreement.

The review is to have regard to and complement – not duplicate – the previous findings of the first Productivity Commission review of progress on the National Agreement, published on 7 January 2024, and the Independent Aboriginal and Torres Strait Islander-led Review, published on 21 June 2025.

The Productivity Commission should provide recommendations on how to improve, hasten and strengthen implementation of existing commitments in the Agreement. Where necessary to support implementation of existing commitments, the Productivity Commission should provide recommendations on potential changes to the Agreement and its targets, indicators and trajectories, and on data improvements.

Process

The Productivity Commission is to consult broadly. This includes with Aboriginal and Torres Strait Islander people, communities and organisations, and with local, state, territory and Commonwealth governments. Input and engagement should also be invited through submissions and other relevant approaches.

The Productivity Commission should publicly release a draft report and provide its final report to the Joint Council on Closing the Gap within 12 months of receipt of these terms of reference. The final
report will also be published.

Yours sincerely

[signed]

The Hon Jim Chalmers MP

[Received 28 August 2026]