Closing the Gap: we can’t afford to ignore what works
Originally published in The Mandarin on 07 May 2026
Budget season is well underway, and state and federal governments have been casting far and wide for savings. Balancing the books is an important part of responsible government – but good fiscal management is not just about spending less, it's also about spending on the right things.
Australia's experience with the National Agreement on Closing the Gap is a case in point. When governments signed the Agreement in 2020, they acknowledged that the 'government knows best' policies of the past were a costly dead end, and that progress was only possible by working in genuine partnership with Aboriginal and Torres Strait Islander people.
In our review of the progress towards the Agreement in 2024, our colleagues at the Productivity Commission found that where power and decision making are shared with community-controlled organisations, progress on outcomes has often followed. This new approach is delivering results. It also makes good economic sense.
For example, investing in programs that reduce the risk of incarceration for Aboriginal and Torres Strait Islander people can lead to significantly better outcomes at much lower costs. The Maranguka Justice Reinvestment in NSW cost $600,000 to implement, but its impact, through reduction in criminal incidents and custody days, was over $3 million. At a time when NSW alone spends nearly $750 million annually on the incarceration and community supervision of Aboriginal and Torres Strait Islander people, the case for shifting investment towards prevention is compelling.
The case for shared decision-making and delivery is just as clear in care services. In Queensland, the Aboriginal and Torres Strait Islander-led Birthing in Our Country service has increased access to maternity care, reduced pre-term births and improved outcomes for mothers and babies. In the process, the service saved the health system $4,810 for every mother-baby pair compared to standard care.
It’s evidence of what Aboriginal and Torres Strait Islander people, as well as program evaluations, have long said: when people can access services and support that reflect their lived experience, it improves outcomes and prevents the need for more costly services down the track. An analysis of Aboriginal and Torres Strait Islander health programs found investing $1 in primary care in remote Aboriginal and Torres Strait Islander communities saved $3.95–$11.75 in hospital costs, while lowering rates of hospitalisation and mortality.
As the Productivity Commission found in its last review of the Closing the Gap Agreement – when governments value and support the knowledge and lived experience of Aboriginal and Torres Strait Islander communities, we all benefit. However, too often these benefits remain isolated in pockets of good practice rather than becoming the standard. The scale of transformation required within governments to consistently engage and partner with communities is significant, but the possible cost savings and community outcomes far outweigh the investment required.
This is not an argument for a blank cheque. We need to build in appropriate monitoring, evaluation and engagement from the start so that funding goes towards initiatives that bring real benefits to communities and reduce long-term costs.
The Productivity Commission’s upcoming review of the National Agreement provides just such an opportunity. We will hear from Aboriginal and Torres Strait Islander people – and from governments – about what is working well and where progress is falling short.
There are just five years left to meet most of the targets under the National Agreement on Closing the Gap. Earlier this year, the Prime Minister made clear the government is “not contemplating failure”. The real test now is whether that ambition is matched by the decisions we make going forward.
The question is not whether we can afford to invest in Closing the Gap, but whether we can afford to ignore what we know works.
