Introduction

1.1 In 2006 the Council of Australian Governments (COAG)⁵ agreed to an intergovernmental approach to ‘closing the gap in outcomes between Indigenous people and other Australians in key areas’⁶, which led to the establishment of the National Indigenous Reform Agreement (Closing the Gap) (NIRA) in 2008. The NIRA committed the Australian, state and territory governments to a framework of Closing the Gap objectives, outcomes, outputs, performance measures and six targets (two of which related to schooling or early childhood development).

1.2 In February 2018, ten years after the establishment of the NIRA, a Special Gathering of prominent Aboriginal and Torres Strait Islanders presented a statement setting out priorities for a new Closing the Gap agenda. It called on governments to negotiate specific targets with Aboriginal and Torres Strait peoples across nine priority areas, one of which was education.⁷ In December 2018 COAG released a statement committing to a refresh of the Closing the Gap framework, which stated that the NIRA had been negotiated with little to no input from Aboriginal and Torres Islander peoples and with an inadequate understanding of the mechanisms and timeframes needed.⁸

1.3 In March 2019 the Coalition of Aboriginal and Torres Strait Islander Peak Organisations (Coalition of Peaks) was formed as a representative body of over 80 Aboriginal and Torres Strait Islander community-controlled peak organisations and 800 other member organisations.⁹ The Coalition of Peaks’ goal is to provide legitimate community-controlled representation on Aboriginal and Torres Strait Islander policy.¹⁰

1.4 In March 2019 the Coalition of Peaks and COAG signed the Partnership Agreement on Closing the Gap 2019–2029 (Partnership Agreement). The Partnership Agreement objectives are to enhance outcomes for Aboriginal and Torres Strait Islander people through full equitable participation of Aboriginal and Torres Strait Islander peoples in developing and implementing a framework for Closing the Gap.¹¹

1.5 The Partnership Agreement established the Joint Council of Australian Governments and Aboriginal and Torres Strait Islander People on Closing the Gap (Joint Council). Membership of Joint Council comprises one minister from each jurisdiction, one representative of the Australian Local Government Association (ALGA) and 12 representatives nominated by the Coalition of Peaks. Joint Council has equal representation from the Coalition of Peaks and governments.¹² Joint Council is supported by a Partnership Working Group (PWG), which is made up of senior government officials and representatives from the Coalition of Peaks and ALGA.

The National Agreement on Closing the Gap

1.6 From September to December 2019, the Coalition of Peaks held an ‘engagement process’ around Australia to inform the development of a new national agreement. In July 2020 the first ministers of all Australian governments, the lead convenor of the Coalition of Peaks and the President of ALGA signed the National Agreement on Closing the Gap (National Agreement).¹³ The objective of the National 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’.¹⁴

1.7 The Australian Government is jointly accountable with state and territory governments for the implementation of the National Agreement¹⁵ and each party has annual reporting requirements. The Prime Minister’s foreword to the 2024–25 Commonwealth Closing the Gap Annual Report and Implementation Plan stated:

The National Agreement on Closing the Gap is based on the understanding that when Aboriginal and Torres Strait Islander people have a genuine say in the programs and services that affect them, better outcomes are achieved … governments have to be willing to share decision-making with communities and empower the Aboriginal and Torres Strait Islander organisations delivering critical services on the ground.¹⁶

1.8 The NIAA advised the ANAO in August 2025 that the National Agreement is not a funding mechanism and does not facilitate funding allocations and that the NIAA does not collect aggregate data on overall investment.

1.9 As at June 2025 the National Agreement includes 17 socio-economic outcome areas with 19 targets. This audit focuses on the three outcome areas related to schooling and early childhood development, which comprise Targets 3, 4 and 5 (Figure 1.1).

Figure 1.1: Schooling and early childhood development outcomes and targets

Source: National Agreement on Closing the Gap.

1.10 As at June 2025, for Australia as a whole, Target 3 was assessed to be improving and on track to be met; Target 4 was assessed to be worsening; and Target 5 was assessed to be improving but not on track to be met (Figure 1.2).

Figure 1.2: Progress on achieving Targets 3, 4 and 5, reporting as at June 2025

Source: Productivity Commission, Closing the Gap Information Repository - Dashboard, PC, 2025, available from https://www.pc.gov.au/closing-the-gap-data/dashboard/ [accessed 22 June 2025].

1.11 In addition to including the Coalition of Peaks as a party to the National Agreement, a key difference between the NIRA and the National Agreement is the inclusion in the National Agreement of four ‘priority reforms’ that are focussed on changing ‘the way governments work to accelerate improvements in the lives of Aboriginal and Torres Strait Islander people’¹⁷ (Table 1.1).

Table 1.1: Priority reforms of the National Agreement on Closing the Gap

Source: Closing the Gap, Priority Reform Areas for Joint National Action, Closing the Gap, 2020, available from https://www.closingthegap.gov.au/national-agreement/national-agreement-closing-the-gap/ 6-priority-reform-areas [accessed 16 January 2025]; and Closing the Gap, Objective and Outcomes, Closing the Gap, 2020, available from https://www.closingthegap.gov.au/national-agreement/national-agreement-closing-the-gap/ 3-objective-and-outcomes [accessed 16 January 2025].

1.12 Under Priority Reform 1, the National Agreement recognises and requires two forms of partnership: policy partnerships and place-based partnerships.¹⁸

• Policy partnerships are partnerships created for the purpose of working on discrete policy areas, such as education, health or housing.
• Place-based partnerships are partnerships based on a specific region, between government and Aboriginal and Torres Strait Islander representatives, and others by agreement, from those specific areas.

1.13 In relation to Priority Reform 2, the National Agreement defines an Aboriginal and/or Torres Strait Islander community-controlled organisation as an organisation that delivers services, including land and resource management, that builds the strength and empowerment of Aboriginal and Torres Strait Islander communities and people and is: incorporated under relevant legislation and not-for-profit; controlled and operated by Aboriginal and/or Torres Strait Islander people; connected to the community, or communities, in which they deliver the services; and governed by a majority Aboriginal and/or Torres Strait Islander governing body.¹⁹

1.14 Other key terms used in this audit are explained in the glossary at Appendix 3.

Australian Government’s role in Closing the Gap in schooling and early childhood development

1.15 This audit examines four Australian Government entities with key roles relating to Targets 3, 4 and 5.

• Department of Education (Education) — Education’s role includes co-chairing the Early Childhood Care and Development Policy Partnership (ECCDPP); working with peak Aboriginal and Torres Strait Islander organisations (namely, SNAICC — National Voice for our Children (SNAICC) and the National Aboriginal and Torres Strait Islander Education Corporation (NATSIEC)); and participating in a place-based partnership in the East Kimberley, Western Australia.²⁰ Since 2020 Education has led negotiations for four relevant federal funding agreements: the Preschool Reform Agreement (2021), On Country Learning (2023), the Better and Fairer Schools Agreement (2025–2034) and the Better and Fairer Schools Agreement — Full and Fair Funding (2025–2034).
• Department of Social Services (DSS) — DSS has programs that contribute to progressing achievement of Targets 3 and 4, including through implementation of the Early Years Strategy²¹ and the First Nations Playgroups pilot grant program; acting as an Australian Government partner of the ECCDPP; and supporting the East Kimberly place-based partnership.
• National Indigenous Australians Agency (NIAA) — The NIAA leads and coordinates the development and implementation of Closing the Gap targets in partnership with Indigenous Australians²² and is the lead agency for monitoring and reporting on the National Agreement. This includes responsibility for the coordination and production of the annual Australian Government implementation plan and annual report; managing the Commonwealth Closing the Gap Partnership Stocktake (see Appendix 6); developing and maintaining formal partnerships with the Coalition of Peaks and Aboriginal and Torres Strait Islander representative organisations; attending policy partnership meetings as a non-voting member; and supporting states and territories and Aboriginal and Torres Strait Islander people in the establishment of place-based partnerships. Through its regional network²³ and funded programs including the Indigenous Advancement Strategy²⁴, the NIAA has visibility of partnership approaches.
• Productivity Commission (PC) — The PC states that it is ‘the Australian Government’s independent research and advisory body on economic, social and environmental issues affecting the welfare of Australians’.²⁵ The PC conducts a three-yearly review of the National Agreement; publishes an Annual Data Compilation Report; and maintains a Closing the Gap data dashboard on its website.²⁶

Rationale for undertaking the audit

1.16 There is a high level of Parliamentary and community interest in policies that aim to address Aboriginal and Torres Strait Islander disadvantage. Multiple reviews have identified that progress in Closing the Gap has been slow. All parties to the National Agreement committed to:

mobilising all avenues and opportunities available to them to meet the objective of this Agreement … in a way that takes full account of, promotes, and does not diminish in any way, the cultures of Aboriginal and Torres Strait Islander people.²⁷

1.17 The National Agreement on Closing the Gap, for the first time, formally recognised Aboriginal and Torres Strait Islander people as partners and established new ways of working called the priority reforms. The priority reforms are premised on an understanding that the way the commitments are delivered will influence the achievement of outcomes.

1.18 Stakeholders rely on the monitoring and reporting arrangements led by the NIAA and PC. Transparency is critical for understanding the level of progress that is being made towards achieving the Closing the Gap socio-economic outcomes and priority reforms.

1.19 This audit provides the Australian Parliament with assurance on whether activities of the audited entities have been effectively meeting the partnership requirements of the National Agreement in the areas of schooling and early childhood development, and whether there has been transparency in annual progress reporting.

Audit approach

Audit objective, criteria and scope

1.20 The objective of the audit was to assess the effectiveness of partnership arrangements, funding design activities and measurement of progress for schooling and early childhood development commitments under the National Agreement on Closing the Gap.

1.21 To form a conclusion against the audit objective, the following high-level criteria were adopted.

• Are Australian Government entities working in partnership in developing policy options for schooling and early childhood development commitments under the National Agreement?
• Have fit for purpose Australian Government funding arrangements been designed for schooling and early childhood development commitments under the National Agreement?
• Is the Australian Government’s progress reporting reliable for schooling and early childhood development Closing the Gap socio-economic targets?

1.22 In developing the audit scope and testing approach, the ANAO met with the Coalition of Peaks, SNAICC, NATSIEC, the Australian Public Service Commission, the Australian Human Rights Commission and the Audit Office of New South Wales.

Audit methodology

1.23 To address the audit objective, the audit methodology included:

• meeting with the Coalition of Peaks, SNAICC, NATSIEC, Indigenous Education Consultative Meeting (IECM) and the ECCDPP;
• meeting with Aboriginal and Torres Strait Islander stakeholders on country in Ceduna, South Australia;
• meeting with officials from the audited entities, other Australian Government entities, state and territory governments, the Australian Local Government Association and the Local Government Association of the Northern Territory;
• observing policy and place-based partnership meetings in person and online;
• reviewing entity documentation and undertaking walk-throughs of entity processes;
• analysing published submissions provided to related reviews;
• sharing and discussing content of report preparation papers with the Coalition of Peaks, SNAICC, NATSIEC, members of the ECCDPP, Aboriginal Peak Organisations Northern Territory, Binarri-binyja yarrawoo Aboriginal Corporation, Gunawuna Jungai Limited and Australian Public Service Commission officials;
• contacting 583 organisations to inform them of the audit and invite contributions²⁸; and
• analysing 11 written contributions to the audit received from observers and providers of children’s services and education and several Aboriginal and Torres Strait Islander peak bodies.

1.24 The audit examines Targets 3, 4 and 5. In designing the criteria for this audit, ANAO incorporated elements of Priority Reforms 1 and 2. The ANAO acknowledges that all Closing the Gap socio-economic targets and priority reforms are inter-related, and that while the Australian Government has a critical role in the implementation of the National Agreement, responsibilities and accountability are shared between the parties to the National Agreement.

1.25 The audit does not make findings about: the adequacy of funding provided by the Australian Government; or whether the partnership approaches meet all expectations of signatories to the National Agreement or of Aboriginal and Torres Strait Islander peoples; and does not draw conclusions about why Closing the Gap outcomes are or are not being achieved. The PC’s Review of the National Agreement on Closing the Gap and the Independent Aboriginal and Torres Strait Islander-Led Review of Closing the Gap were published in January 2024²⁹ and June 2025, respectively, and address some of these matters.³⁰

1.26 The audit was conducted in accordance with ANAO Auditing Standards at a cost to the ANAO of approximately $1,269,900.

1.27 The team members for this audit were April Howley, Tony Varnes, Katiloka Ata, Benjamin Foreman, Callum Mann, Yoann Colin, Dr Imogen Sykes-Bridge and Christine Chalmers.

2.1 The National Agreement on Closing the Gap sets out obligations for the Australian Government to work in partnership with Aboriginal and Torres Strait Islander people and share accountability for the outcomes and targets with states and territories. Priority Reform 1 is ‘formal partnerships and shared decision-making’. The National Agreement on Closing the Gap states that:

The Parties commit to building and strengthening structures that empower Aboriginal and Torres Strait Islander people to share decision-making authority with governments to accelerate policy and place-based progress against Closing the Gap.³¹

2.2 The National Agreement on Closing the Gap states that Joint Council (see paragraph 1.5) will establish a joined-up approach between the Australian Government, state and territory governments and Aboriginal and Torres Strait Islander representatives in five priority policy areas, including early childhood care and development. While ‘partnership actions do not limit opportunities for pursuing joined up effort by the Parties in other policy areas and places’³², the National Agreement on Closing the Gap requires the establishment of two specific types of partnership: policy and place-based (see paragraph 1.12).

Is there guidance for Australian Government entities on how to work in partnership?

2.3 Clause 32 of the National Agreement on Closing the Gap sets out the elements of ‘strong partnership’ (see Appendix 4). Between 2022 and 2024, the Australian Government committed to developing further guidance on working in partnership by 2023 in its annual Closing the Gap Commonwealth Implementation Plans (Implementation Plans) and related public documents (which by 2024 was not achieved).³³

2.4 In April 2024 the APSC released the Charter of Partnerships and Engagement — Good practice guidance (Charter of Partnerships)³⁴, which presented a spectrum of engagement and partnership approaches ranging from sharing to empowering.³⁵ The guidance is not specific to partnering with Aboriginal and Torres Strait Islander people.

2.5 In May 2024 the Department of the Prime Minister and Cabinet (PM&C) drafted a Guidance Note: Embedding priority reforms in National Agreements (Guidance Note), which identifies actions that the Australian Government can take when developing other national agreements with the states and territories to meet commitments under the National Agreement on Closing the Gap. PM&C advised the ANAO in July 2025 that in April 2025 the First Deputies Group endorsed the Guidance Note.³⁶

2.6 In April 2025 the Department of Health, Disability and Ageing (DHDA) published an Aboriginal and Torres Strait Islander Partnership and Engagement Framework, which has been designed for use by DHDA officials.³⁷

2.7 In June 2025 the APSC published the First Nations Partnership Playbook (Playbook) on its website, describing it as ‘the first step toward consistent partnership skills and practice through the [Australian Public Service].’³⁸

Did entities work in partnership through policy partnerships?

2.8 There are three partnership arrangements, all administered by Education, where Australian Government entities worked with Aboriginal and Torres Strait Islander people to develop policy for schooling and early childhood development measures under the National Agreement on Closing the Gap, comprising:

• Early Childhood Care and Development Policy Partnership (ECCDPP) — established in 2022, as required under the National Agreement on Closing the Gap, between Education, other Australian Government entities, SNAICC — National Voice for our Children (SNAICC), First Nations representatives and state and territory governments under clause 38³⁹ of the National Agreement on Closing the Gap;
• NATSIEC partnership agreement — established in 2025 between Education and the National Aboriginal and Torres Strait Islander Education Corporation (NATSIEC); and
• SNAICC partnership agreement — established in 2025 between Education and SNAICC.

2.9 A fourth arrangement — the Indigenous Education Consultative Meeting (IECM) — was established between Education and First Nations representatives from each state and territory in 2017, prior to the National Agreement on Closing the Gap. The IECM was Education’s formal engagement arrangement with First Nations people focused on education prior to 2025. The IECM supported the establishment of the NATSIEC partnership agreement and complements the other partnership arrangements described in paragraph 2.8. The ANAO did not further assess the IECM, which was intended as an engagement mechanism rather than a partnership.

Working in partnership arrangements to develop policy

2.10 At clause 35, the National Agreement on Closing the Gap states that formal policy partnerships will include elements outlined in clauses 32 and 33 (see Appendix 4).

• Clause 32 sets out ‘strong partnership’ elements across three categories: accountable and representative, a formal agreement in place, and shared decision-making.
• Clause 33 sets out ‘resourcing’ elements and states: ‘The Parties recognise that adequate funding is needed to support Aboriginal and Torres Strait Islander parties to be partners with governments in formal partnerships.’⁴⁰

2.11 Effective policy partnerships also require coordination between Australian Government entities with shared responsibility, and with state and territory governments (which have joint accountability under the National Agreement).

Policy partnership under the National Agreement on Closing the Gap

2.12 The ECCDPP is a formal policy partnership under the National Agreement on Closing the Gap. The agreement to Implement the Early Childhood Care and Development Policy Partnership (ECCDPP Agreement) states its purpose is ‘to establish a mechanism for the Parties to develop a joined-up approach to Aboriginal and Torres Strait Islander early childhood care and development policy’. The ECCDPP is responsible for progressing Closing the Gap Targets 2, 3, 4, 12 and 13. The primary function of the ECCDPP is to make recommendations to all governments, through Joint Council, to improve the early childhood outcomes of Aboriginal and Torres Strait Islander children.

2.13 The ECCDPP is made of up of nine members from the Australian Government and state and territory governments, 11 members from the Coalition of Peaks or independent First Nations people, and 12 ‘partners’ (including DSS and the NIAA). Education and SNAICC are co-chair and co-secretariat. NATSIEC is not a member of the ECCDPP.

2.14 The ECCDPP Agreement largely aligned with clause 32 and fully aligned with clause 33 of the National Agreement on Closing the Gap (Table 2.1 and Appendix 4). The ECCDPP’s implementation as at June 2025 was also largely aligned. For example, and at the meetings observed by ANAO, decisions were made by consensus and Aboriginal and Torres Strait Islander members shared lived experience. Aboriginal and Torres Strait Islander members of the ECCDPP that spoke to the ANAO advised that the ECCDPP reflected a partnership approach and they felt they could speak freely in ECCDPP meetings. Minutes showed First Nations members engaging throughout partnership meetings in response to agenda items.

Table 2.1: ECCDPP — Alignment with ‘strong partnership’ principles, as at June 2025

Key: ◆ Largely or fully aligns with the strong partnership element ▲ Partly aligns with the strong partnership element ■ Does not align with the strong partnership element

Note a: It does not specify if other Coalition of Peaks members or independent Aboriginal and Torres Strait Islander representatives are also required to agree.

Note b: The ECCDPP Agreement is available on Education’s website at https://www.education.gov.au/closing-the-gap/closing-gap-early-childhood/early-childhood-care-and-development-policy-partnership.

Note c: Clause 33 states: ‘The Parties recognise that adequate funding is needed to support Aboriginal and Torres Strait Islander parties to be partners with governments in formal partnerships. This includes agreed funding for Aboriginal and Torres Strait Islander parties to: engage independent policy advice; meet independently of governments to determine their own policy positions; support strengthened governance between and across Aboriginal and Torres Strait Islander organisations and parties; and engage with and seek advice from Aboriginal and Torres Strait Islander people from all relevant groups within affected communities, including but not limited to Elders, Traditional Owners and Native Title Holders.’

Source: ANAO analysis.

2.15 The ANAO also assessed coordination across governments in relation to the ECCDPP. The ECCDPP Policy Partnership allowed for effective coordination between and across the Australian and state and territory governments. Local government is not represented on the ECCDPP.⁴¹ The ECCDPP Agreement allows for each government member to invite a ‘partner’ from a different government entity to attend meetings, with the aim of cross-portfolio engagement and sharing expertise (see paragraph 2.11). For some meetings, the ECCDPP invited guests from other Australian and state and territory government entities, including the Productivity Commission in three meetings. As the ECCDPP co-chair, Education has responsibility for managing engagement with government members. There is no established process for coordinated government input into meeting agenda, however Education coordinated pre-briefs for all government members to discuss the meeting agenda in advance of each ECCDPP meeting between November 2022 and November 2024. The Operating Protocols allow the presentation of papers with the co-chairs’ agreement. All of the eight state and territory government members and three partners that the ANAO met with advised that Education was working well across all levels of government in the ECCDPP.

Bilateral partnership arrangements

2.16 For the other two partnership agreements, the ANAO considered whether they were aligned with the principles of clauses 32 and 33 that are relevant to bilateral and less formal partnership arrangements (see Appendix 5). The ANAO did not assess implementation of these two agreements due to their recent establishment.

• The March 2025 NATISEC partnership agreement commits to implementing the priority reforms and Targets 3, 4, 5, 6, 7 and 16. The NATISEC partnership agreement was the first partnership arrangement dedicated to Target 5. The NATSIEC partnership agreement is fully aligned with relevant clause 32 and 33 principles (Appendix 4).
• In March 2025 Education signed a bilateral partnership agreement with SNAICC (SNAICC partnership agreement) relating to policy and program design and implementation for Targets 3 and 4. Education advised the ANAO in July 2025 that terms of reference for the SNAICC partnership were agreed in principle between the parties on 4 June 2025. The SNAICC agreement is fully aligned with relevant clause 32 and 33 principles (Appendix 5).

Evaluation

2.17 The Charter of Partnerships states that partners should have an agreed way to regularly review what works and does not work and why.⁴² This supports continuous improvement. Commonwealth Closing the Gap Implementation Plans have over time made various commitments to establish an evaluation methodology.

• The 2023 Implementation Plan committed to development of an evaluation methodology for the policy partnerships in 2023.⁴³
• The 2024 Implementation Plan Action Status Table stated that the evaluation methodology had been delayed, that it was a priority for 2024, the Australian Government would engage a consultant to develop it, and that the ‘The Commonwealth has shifted to providing Policy Partnerships with a guideline to support consistent evaluations.’⁴⁴ In November 2024 the NIAA developed the ‘Policy Partnership Evaluation Guideline Statement of Requirement’. It is a non-mandatory framework to guide policy partnerships’ statements of requirement when procuring a provider to develop and implement an evaluation methodology.
• The 2025 Implementation Plan Actions Table listed as an action to ‘Finalise the Policy Partnership Evaluation Guideline to support Policy Partnerships to develop individual, yet consistent, evaluations across the Commonwealth’ by 30 April 2025.⁴⁵

2.18 As at August 2025 some evaluation activities have occurred with mixed reported effectiveness (Appendix 6).

• In 2023 the Australian Government’s Closing the Gap Partnership Stocktake (see paragraph 1.15) described the ECCDPP as meeting all applicable elements.
• At a 30 April to 1 May 2025 meeting, the ECCDPP conducted a health check, where members discussed strengths and potential areas for improvement. One area for improvement was arranging the meeting agenda so that strategic decisions were covered earlier in meetings.
• The 2025 Independent Aboriginal and Torres Strait Islander-led Review of Closing the Gap (see paragraph 1.25) found that there could be better coordination between policy and place-based partnerships; many policy partnerships still operate with government retaining ultimate decision-making authority; there was no clear mechanism for holding governments accountable where their actions diverge from policy partnership commitments; and policy partnerships, while highly valued, are not yet functioning as intended. These results were not specific to the schooling and early childhood development sector.

Reporting

2.19 Clause 37 of the National Agreement on Closing the Gap states that:

Government Parties will include in their annual reports (clauses 118 and 119) information on partnerships, including the number of partnerships, those that have been reviewed, for each partnership which strong partnership elements are met and unmet, and what has been achieved through the partnerships.

2.20 Although individual Australian Government entities and other parties to the National Agreement may report on progress through entity annual reports and other channels, the National Agreement establishes a clear requirement for the Australian Government Closing the Gap annual reports to include information about partnerships, including their achievements against intended outcomes. Table 2.2 assesses the Australian Government’s Closing the Gap annual reports against clause 37. The required information was fully provided in the Australian Government 2022 Annual Report and partly provided in the 2023 and 2024 annual reports. The drafts of the 2023 and 2024 annual reports provided by the NIAA to the Minister for Indigenous Australians did not include the information shown as missing in Table 2.2.

Table 2.2: Alignment of Australian Government annual reports with partnership reporting requirements

Key: ◆ Largely or full aligns with clause 37 ▲ Partly aligns with clause 37 ■ Does not align with clause 37

Note a: The 2024 Annual Report did not identify the number of partnerships, however it did state that a partnership ‘stocktake’ received information on 108 self-reported arrangements within government entities. The 2024 Annual Report stated that the partnership stocktake assessed the partnerships against the strong partnership elements. The stocktake results were not published as at August 2025.

Source: ANAO analysis.

Did entities work in partnership through place-based partnerships?

2.21 Clause 39 of the National Agreement on Closing the Gap states that:

By 2024, six new place-based partnerships will be established across Australia under Jurisdictional Implementation Plans. These place-based partnerships will be between the Commonwealth, relevant states or territories, local government and agreed communities. They will be consistent with the agreed partnership elements and build on existing place based approaches.

2.22 In 2021 it was agreed that the state and territory governments would resource the establishment and governance costs for any place-based partnerships (see paragraph 1.12) in their jurisdiction. As a party to the National Agreement on Closing the Gap, the Australian Government has a commitment to and interest in the establishment of the place-based partnerships, and is required to be a party to them.⁴⁶

2.23 Place-based partnerships are referenced in the Australian Government’s Closing the Gap annual reports and implementation plans.

• The Australian Government’s 2022 Implementation Plan (published in July 2021) stated that the selection of locations for place-based partnerships would be made through shared decision-making between the relevant state/territory government, local government, Aboriginal and Torres Strait Islander communities and regional managers in the NIAA regional network (see paragraph 1.15), and that the Australian Government would support shared decision-making by ensuring that the scope and implementation was in line with the strong partnership elements outlined in the National Agreement on Closing the Gap, including building on existing place-based approaches that aligned with community aspirations.⁴⁷ The 2022 Implementation Plan stated that locations would be considered by Joint Council by November 2021, with the place-based partnerships to be in place by 2024, in accordance with clause 39 of the National Agreement.
• The Australian Government’s 2023 Annual Report and 2024 Implementation Plan listed six locations agreed by Joint Council⁴⁸: Doomadgee, Queensland; East Kimberley, Western Australia (WA); Gippsland, Victoria; Maningrida, Northern Territory; Tamworth, New South Wales; and western suburbs of Adelaide, South Australia. The 2024 Implementation Plan stated the place-based partnerships would be fully operational and established by the end of 2024.⁴⁹
• As at June 2025 place-based partnerships were not fully established through a formal agreement. The 2025 Implementation Plan Action Table, which was considered by government, states that the Australian Government would support each of the state and territory jurisdictions to establish a formal agreement for the place-based partnership by 31 December 2025.⁵⁰

2.24 As at June 2025 four of the six place-based partnerships had developed early indications of priorities. Two place-based partnerships had identified a focus on the early years: East Kimberley and Doomadgee (where early childhood is one of a range of initial priority areas).

Establishment of place-based partnerships

2.25 The NIAA advised the ANAO in February 2025 that the Australian Government’s participation in the development of place-based partnerships is undertaken by the NIAA regional network in the location of the place-based partnerships. The NIAA did not document a strategy for assisting with the establishment of, or engaging with, the place-based partnerships.

East Kimberley

2.26 In May 2024 the NIAA advised the Minister for Indigenous Australians that the NIAA was in a ‘unique position’ to assist in coordinating Australian Government effort in relation to the East Kimberley place-based partnership. As at June 2025, while a finalised partnership agreement was not yet in place, governance processes for the East Kimberly place-based partnership had been established.

• Backbone organisation — The East Kimberley is one of ten Empowered Communities regions.⁵¹ In each of the regions, a First Nations ‘backbone organisation’ is funded by the NIAA through grants to work with communities and partner organisations in the region to identify and progress local priorities. The Empowered Communities backbone organisation in the East Kimberley is Binarri-binyja yarrawoo (BBY). BBY also serves as the backbone organisation for the East Kimberley place-based partnership.
• Partnership Table (commencing November 2023) — Co-chaired by the Western Australian (WA) Government and BBY, the Partnership Table is also made up of Education, DHDA, the NIAA, local government and Indigenous organisations. Between November 2023 and December 2024 there were seven Partnership Table meetings, of which Education and the NIAA attended all and DSS attended six. April 2024 terms of reference state the purpose of the Partnership Table is, in part, to develop a partnership agreement. The development of the partnership agreement was discussed at all Partnership Table meetings.
• Partnership Operations Group (Operations Group) (commencing February 2024) — Co-chaired by the WA Government and BBY, attendees also include the NIAA and the WA Department of Premier and Cabinet. Between February 2024 and January 2025 there were six meetings, all of which were attended by the NIAA.
• Framework Agreement (2025) — This sets out how the partnership will operate and how the partnership agreement will be developed. The Framework Agreement states that Commonwealth partners comprise Education, DHDA, DSS and the NIAA, and that the Kimberley office of the NIAA regional network will support the coordination of the Australian Government agencies party to the Framework Agreement.
• Partnership agreement — Through Partnership Table and Operations Group meetings, the NIAA, Education and DSS contributed to draft versions of the partnership agreement. As at June 2025, the East Kimberley place-based partnership agreement was in draft form but not yet finalised.

2.27 As at June 2025 the draft partnership agreement reflects most of the ‘strong partnership’ elements (see Appendix 4), but does not consider appointment or selection of Aboriginal and Torres Strait Islander members (clause 32.a(i)); the negotiating and decision-making authority of government representatives (clause 32.a(ii)); and the requirement for Aboriginal and Torres Strait Islander agreement of agendas for discussions that lead to decisions (clause 32.b(ii)).

2.28 The NIAA has not developed formal coordination processes across the Australian Government or with the states and territories for the East Kimberley place-based partnership. The NIAA collated and provided Australian Government feedback on the draft partnership agreement at a December 2024 meeting. Feedback included the need to detail interaction between the place-based partnership and other initiatives already in place in the community, including Empowered Communities. The NIAA also facilitated the participation of an additional Australian Government entity (DHDA) in Partnership Table meetings.

Doomadgee

2.29 The Queensland Government and local Aboriginal backbone organisation Gunawuna Jungai Limited have led the development of the partnership agreement and processes for the Doomadgee place-based partnership. The NIAA is the Australian Government representative on the Doomadgee Place-based Partnership Working Group (Doomadgee Working Group).

• Terms of reference — Terms of reference for the Doomadgee Working Group were endorsed in January 2024.
• Partnership agreement — Between September 2023 and August 2024 there were 16 Doomadgee Working Group meetings with the NIAA attending all. At each of the 16 meetings, the place-based partnership agreement was discussed and drafts of the agreement were shared for feedback. As at June 2025, the Doomadgee place-based partnership agreement was not yet finalised.

2.30 The draft Doomadgee place-based partnership agreement reflects most of the ‘strong partnership’ elements (see Appendix 4), but does not align with requirements for appointment/selection of Aboriginal and Torres Strait Islander members (clause 32.a(i)); and Aboriginal and Torres Strait Islander agreement of agendas for discussions that lead to decisions (clause 32.b(ii)); the diversity requirements which allow for a wide variety of Aboriginal and Torres Strait Islander people to have their voice heard (clause 32.c(iv)); or transparent decision-making where there is enough time to understand the implications of required decisions (clause 32.c(ii)).

2.31 Effective place-based partnerships require coordination between Australian Government entities with shared responsibility and with state and territory governments, which have joint accountability. To support coordination across the Australian Government on the Doomadgee place-based partnership, the NIAA established in 2023 a relevant version of the Queensland Commonwealth Heads of Agency⁵² and in 2024 a subgroup called the Queensland Place-based Working Group (QLD PBWG). In addition to the NIAA, QLD PBWG membership comprises the Department of Employment and Workplace Relations; DHDA; the Department of Industry, Science and Resources; the Department of the Prime Minister and Cabinet, DSS; the National Emergency Management Agency; and the Department of the Treasury.

2.32 The NIAA advised ANAO in July 2025 that it is supporting Doomadgee to ‘reset its community governance mechanism’.

Reporting

2.34 Australian Government Closing the Gap annual reports for 2022, 2023 and 2024 did not fully align with the requirement in clause 37 (see paragraph 2.19) to report on place-based partnerships.

• 2022 Annual Report — The Doomadgee and East Kimberly place-based partnerships were mentioned.⁵³ Noting that the two place-based partnerships were not established at this stage, they were not counted in the total number of partnerships, and were not included in the partnership stocktake.
• 2023 Annual Report — While a total number of partnerships was reported, it is not clear if this included place-based partnerships as a list was not included. The 2023 Annual Report did not describe what had been achieved through place-based partnerships.
• 2024 Annual Report — Place-based partnerships were not mentioned.

3.1 Federal funding and grant agreements are the primary funding mechanisms used by the Australian Government to progress Closing the Gap commitments in schooling and early childhood development.

• A federal funding agreement is an agreement between the Australian Government and at least one state or territory government to provide funding to enact policy and support services.⁵⁴
• An Australian Government grant is an arrangement for the provision of financial assistance to a grantee with the intention of addressing one or more of the Australian Government’s policy outcomes while assisting the grantee to achieve its objectives.⁵⁵

3.2 Since 2009 federal funding agreements are subject to the requirements of the Intergovernmental Agreement on Federal Financial Relations (IGA FFR).⁵⁶ The IGA FFR recognises that the states and territories have primary responsibility for many areas of service delivery, but that coordinated action is necessary to address Australia’s economic and social challenges. The August 2020 Federation Funding Agreement (FFA) Framework is a schedule to the IGA FFR and established new governance arrangements for federal funding agreements including the consolidation of all federal funding agreements into two categories.⁵⁷

• National agreements — National agreements act as sources of ongoing funding. As at June 2025 six national agreements were listed on the FFR website, including the Better and Fairer Schools Agreement.⁵⁸
• Sectoral agreements — Described as ‘FFA schedules’, bilateral and multilateral sectoral agreements address one of five specific sectors, including education and skills.⁵⁹

3.3 Since July 2020 the Australian Government has committed over $20.2 billion to the states and territories for schooling and early childhood development through 10 federal funding agreements.

3.4 Thirty-three grant programs⁶⁰ entered into by Education, DSS or the NIAA between July 2020 and September 2024 were specifically funding services for Aboriginal and Torres Strait Islander people and related to Closing the Gap Targets 3, 4 and/or 5. Of these: six were administered by Education, two were administered by DSS, and 25 were administered by the NIAA (see Appendix 7). The 33 grant programs comprise 726 individual grant agreements providing approximately $1.25 billion in total funding between July 2020 and September 2024.

Are federal funding agreements designed in line with Closing the Gap principles?

3.5 The 10 federal funding agreements for schooling and early childhood development (see paragraph 3.2) comprise two related national agreements (Better and Fairer Schools Agreement 2025–2034 and Better and Fairer Schools — Full and Fair Funding 2025–2034⁶¹), and eight FFA schedules: Consent and Respectful Relationships Education; National Student Wellbeing Program; Northern Territory Remote Aboriginal Investment; On Country Learning; Preschool Reform Agreement; Schools Upgrade Fund Capital Investments; Student Wellbeing Boost; and Workload Reduction Fund. Of the 10 federal funding agreements, four are directly relevant to Closing the Gap Targets 3, 4 or 5:

• Preschool Reform Agreement (PRA) (2021);
• On Country Learning (OCL) (2023);
• Better and Fairer Schools Agreement (BFSA) (2025); and
• Northern Territory Remote Aboriginal Investment Agreement (NTRAI) (2025).

3.6 In September 2023 the Coalition of Peaks wrote to first ministers of all Australian governments with a proposal on how commitments in the National Agreement on Closing the Gap (including the priority reforms — see Table 1.1) should be embedded in mainstream Commonwealth-state funding arrangements. The letter described mainstream funding agreements as a ‘critical funding and performance mechanism’ for Closing the Gap, noting the ‘substantial service delivery’ supported by the agreements, which ‘fundamentally impacts on the lives of Aboriginal and Torres Strait Islander peoples and involve very significant transfers of funding’.

3.7 The National Agreement on Closing the Gap requires new funding initiatives to include a ‘meaningful proportion’⁶² of funding for Aboriginal and Torres Strait Islander organisations with relevant expertise, particularly ACCOs. The Coalition of Peaks’ 2023 letter to first ministers also emphasises the importance of identifying and allocating additional resourcing to build capacity in the community-controlled sector to support growth in the proportion over the period of the agreement.

3.8 The Guidance Note Embedding Priority Reforms in National Agreements (see paragraph 2.5) states that it ‘draws from’ the Coalition of Peaks’ proposal and restates the point that ‘mainstream National Agreements are a critical funding and performance mechanism to be mobilised by Governments to closing the gap’. To achieve this aim, the Guidance Note states that, whether through a renegotiation process or new negotiations, governments should⁶³:

• engage with Aboriginal and Torres Strait Island parties to support the development, negotiation, implementation and evaluation of national agreements in accordance with clauses 32 and 33 of the National Agreement on Closing the Gap (see Appendix 4); and
• consider opportunities through national agreements to support, build the capacity of and transition services to the Aboriginal community-controlled and other Aboriginal and Torres Strait Islander organisations.

3.9 In July 2025 Education advised the ANAO that the Australian Education Act 2013 requirement for ‘needs based’ funding allocations prevented agreements allocating recurrent funding to schools from prescribing that a proportion of funding is provided to the ACCO sector. The Coalition of Peaks letter to first ministers noted that the nature of some national agreements (such as agreements involving funding for public schools) may require adaption of the approach, with governments working with Aboriginal and Torres Strait Islander representative organisations to agree policy reforms that meet the intent of the Priority Reform 2. While it listed the allocation of a meaningful proportion of funding to ACCOs as the primary means of achieving the intent of Priority Reform 2, the July 2025 Guidance Note also stated that:

all [national agreements] are different and will require different approaches, so governments should work with Aboriginal and Torres Strait Islander partners to agree policy reforms that meet the intent of [Priority Reform 2].

Preschool Reform Agreement

3.10 The PRA (1 January 2022 to 31 December 2025) was signed by all Australian governments in December 2021. Education is the lead Australian Government entity for the PRA. The PRA provides $2 billion in funding over four years to states and territories to ‘strengthen the delivery of preschool [and] better prepare children for the first year of school’.⁶⁴ The PRA was negotiated as an FFA schedule in the education and skills sector. PRA has the potential to impact Targets 3 and 4.

3.11 The PRA is not aligned to the principles of working in partnership or strengthening the ACCO sector and is partly aligned to the principle of enabling monitoring and evaluation (Table 3.1).

Table 3.1: Alignment of Preschool Reform Agreement to key principles

Key: ◆ Largely or fully aligned ▲ Partly aligned ■ Not aligned

Note a: AusTender reference CN4040019, valued at $1,430,000, 14 March 2024.

Source: ANAO analysis.

On Country Learning

3.12 OCL (2023 to 2025) was funded in 2023 as part of the Central Australia Plan: A Better, Safer Future for Central Australia (Central Australia Plan). OCL was negotiated between the Australian and Northern Territory (NT) governments as an FFA schedule in the education and skills sector. Education is the lead Australian Government entity for OCL. OCL provides $40.4 million in funding for 44 Central Australian schools to ‘support improved student enrolment, engagement, wellbeing and learning outcomes’.⁶⁵ Activities funded by OCL included literacy and numeracy support, increased flexible learning for secondary students, increased employment of local Aboriginal people in schools, targeted engagement initiatives, and two-way learning opportunities. OCL has the potential to impact Target 5.

3.13 OCL is partly aligned to the three principles (Table 3.2).

Table 3.2: Alignment of On Country Learning to key principles

Key: ◆ Largely or fully aligned ▲ Partly aligned ■ Not aligned

Note a: The Central Australia Plan Aboriginal Leadership Group was formed in June 2023 to advise the Minister for Indigenous Australians, the NT Chief Minister and the Central Australian Regional Controller on the Central Australia Plan.

Note b: A program logic is a tool for program planning and for evaluation (making it easier to see what evaluation questions should be asked). Australian Institute of Family Welfare, How to develop a program logic for planning and evaluation, available from https://aifs.gov.au/resources/practice-guides/how-develop-program-logic-planning-and-evaluation [accessed 7 June 2025]. It is a step-by-step diagram that details inputs (e.g. money, staff, resources) needed to deliver activities and how they should lead to short, medium and long-term outcomes. Commonwealth Evaluation Toolkit Template 2 program logic, Australian Centre for Evaluation. https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fevaluation.treasury.gov.au%2Fsites%2Fevaluation.treasury.gov.au%2Ffiles%2F2023-09%2Ftemplate-2-program-logic.docx&wdOrigin=BROWSELINK [accessed 14 July 2025]

Note c: AusTender reference CN4100620, valued at $379,500, 25 September 2024.

Note d: The Schooling Resource Standard is an estimate of how much total public funding a school needs to meet its students’ educational needs.

Note e: The Australian Government provides recurrent funding for every student enrolled at a school in accordance with the Schooling Resource Standard. Education calculates a school’s Commonwealth recurrent funding entitlement each year in accordance with the Australian Education Act 2013. In 2025, recurrent funding for schools was estimated by Education to total $31.1 billion, comprising $11.9 billion to government schools, $10.4 billion to Catholic schools and $8.7 billion to independent schools. See Department of Education, Recurrent funding for schools, Education, 2025, available from https://www.education.gov.au/recurrent-funding-schools [accessed 4 August 2025].

Source: ANAO analysis.

Better and Fairer Schools Agreement

3.14 The BFSA (2025–26 to 2034–35) is a national agreement, under which the Australian Government committed to provide an additional approximate $16.5 billion to the states and territories over 10 years.⁶⁶ As at 30 June 2025 bilateral agreements under a BFSA heads of agreement had been finalised for all jurisdictions except Victoria. Education is the lead Australian Government entity for the BFSA. The BFSA will increase the Australian Government’s contribution for government schools from 20 to 25 per cent of the Schooling Resource Standard =, except for the NT, for which the contribution will be 40 per cent by 2029. Additional Australian Government funding is tied to reforms. The BFSA seeks to address outcomes in three national priority areas: equity and excellence, wellbeing for learning and engagement, and a strong and sustainable workforce.⁶⁷ The BFSA has the potential to impact Target 5.

3.15 The BFSA is aligned to the principles of working in partnership and enabling monitoring and evaluation, and partly aligned to the principle of strengthening the ACCO sector (Table 3.3).

Table 3.3: Alignment of Better and Fairer Schools Agreement to key principles

Key: ◆ Largely or fully aligned ▲ Partly aligned ■ Not aligned

Source: ANAO analysis.

Northern Territory Remote Aboriginal Investment Agreement

3.17 The NTRAI (February 2025 to 30 June 2031) was established as the latest in a series of agreements that were first made in 2016.⁶⁸ The NTRAI is a bilateral agreement between the Australian Government and the NT Government, and is supported by a trilateral partnership agreement between Aboriginal Peak Organisations NT, the Australian Government and the NT Government. The NIAA is the lead Australian Government entity for the NTRAI. The NTRAI will provide over $842 million over six years to deliver services to remote communities.⁶⁹ The objective of the NTRAI is ‘to enable substantive and enduring opportunities for self-determination for remote Aboriginal communities to close the gap in life outcomes between those communities and other Australians’. The FFA schedules under the NTRAI were under negotiation as at June 2025. One schedule of the NTRAI is expected to focus on activities for early years and access to education.⁷⁰ NTRAI has the potential to impact Targets 3 and 4.

3.18 The trilateral partnership agreement is aligned to the principle of working in partnership (Table 3.4). As at June 2025 the principles of enabling monitoring and evaluation and strengthening the ACCO sector could not be fully assessed given ongoing negotiations of specific bilateral funding schedules. These principles were partly addressed in the overarching partnership agreement.

Table 3.4: Alignment of NT Remote Aboriginal Investment Agreement to key principles

Key: ◆ Largely or fully aligned ▲ Partly aligned ■ Not aligned

Source: ANAO analysis

Are grant programs designed in line with Closing the Gap principles?

3.19 From the population of 33 relevant grant programs (see paragraph 3.4), the ANAO selected a risk-based⁷¹ sample of five grant programs (comprising 267 individual grant agreements valued at approximately $614 million) for more detailed analysis. These comprised: the Clontarf Foundation (administered by Education); Connected Beginnings (Education); First Nations Playgroups (DSS); Junior Rangers (NIAA); and Schooling Projects Operational⁷² (NIAA). Appendix 8 provides information on each grant program in the risk-based sample, including the objectives of the program.

Working in partnership

3.20 The Commonwealth Grants Rules and Principles (CGRPs) state that ‘officials should work together with government and non-government stakeholders to plan, design and undertake grants administration’.⁷³ This is not a requirement for formal partnership, however formal partnerships with Aboriginal and Torres Strait Islander people provide a mechanism to establish shared decision-making and are a key component of Closing the Gap Priority Reform 1.⁷⁴

3.21 Table 3.5 sets out grant opportunity guidelines (grant guidelines)⁷⁵ and a selection of 26 grant agreements with individual grantees⁷⁶ from four grant programs in the risk-based sample⁷⁷, for evidence of partnership with Aboriginal and Torres Strait Islander people in:

• design — design of the grants program;
• funding allocation — selection of grant recipients (noting that the National Agreement on Closing the Gap states that funding decisions remain the responsibility of Australian governments, and noting that officials with spending delegations have legislative duties relating to the commitment of relevant money⁷⁸); and
• delivery — ongoing delivery of the program.

Table 3.5: Alignment of grant programs — Working in partnership

Key: ◆ Largely or fully aligned ▲ Partly aligned ■ Not aligned

Note a: Did the program build on a pilot designed by Aboriginal and Torres Strait Islander people and/or was there an agreement with Aboriginal or Torres Strait Islander people for their input on the original or revised grants program design?

Note b: Was there involvement of Aboriginal or Torres Strait Islander stakeholders in the selection of grant recipients by involvement in: design affecting the applicant pool or eligibility, development of a shortlist of potential applicants or applicants, and/or involvement in the decision to award the grant?

Note c: Did agreements (grant or other related partnership agreements) enable the ongoing input of Aboriginal or Torres Strait Islander stakeholders’ perspectives into the long-term delivery of the program?

Source: ANAO analysis.

3.22 Of the four grant programs, three were fully or largely aligned with the principle of working in partnership (Connected Beginnings, First Nations Playgroups and Junior Rangers); and one (Clontarf) was largely not aligned.

• Clontarf — The Clontarf grant program pre-dates the 2020 National Agreement on Closing the Gap and has received funding from the Australian Government since 2008. The NIAA was responsible for administering the program between 2019 and March 2023, and Education was responsible from April 2023.⁷⁹ The grant program is a closed non-competitive program with funds provided exclusively to the Clontarf Foundation, which is an Australian public company registered with the Australian Charities and Not for Profit Commission.⁸⁰ It is not an Aboriginal and Torres Strait Islander organisation. The April 2023 grant agreement between Education and Clontarf required that Clontarf ‘partner’ with schools to host academies, ‘in consultation’ with Aboriginal and Torres Strait Islander organisations and the broader community. Education advised the ANAO in July 2025 that, while the grant agreement does not explicitly require it, the Clontarf Foundation ‘works closely with requesting schools and communities to undertake a localised scoping study of the appropriateness of establishing an academy.’ Education advised the ANAO that it does not actively monitor the Clontarf Foundation’s consultation practices and that in relation to its scoping work, ‘The department does not require visibility of this operational detail’.
• Connected Beginnings — In 2022 Education contracted SNAICC — National Voice for our Children (SNAICC) to be the Connected Beginnings community partner. As community partner, SNAICC contributed to a site selection methodology that required non-Indigenous grantees to explore options to transition the grant to ACCOs or other community-controlled leadership options.⁸¹ Education contracted SNAICC to provide support to Connected Beginnings services, co-chair the Connected Beginnings Advisory Group, conduct on country community consultations and recommend eligible grantees to Education. SNAICC, in a submission to the ANAO, described Connected Beginnings as ‘a practical example of how working through genuine partnership is improving the availability and quality of universal services for Aboriginal and Torres Strait Islander children and families’.
• First Nations Playgroups — In 2024, DSS contracted SNAICC to be the First Nations Playgroups community partner. SNAICC’s role included input to program design, developing a shortlist of potentially eligible ACCOs and providing capacity-building support to these organisations. Although SNAICC did not have further involvement in funding allocation decisions⁸², an invitation to apply to the program was issued to all 19 shortlisted ACCOs. SNAICC was procured to provide design and support services for the program. In this role, SNAICC was required to provide support for the establishment of new playgroups and to collate client and community feedback and program data in the early stages of the program.
• Junior Rangers — The Junior Rangers Grant Design Strategy stated that the program contributed to Priority Reform 1 and that ‘junior ranger activities will be designed and delivered by local First Nations people’. The Grant Design Strategy drew substantially on the Learning on Country Program, which is described on its website as having been developed by four Northern Territory (NT) Aboriginal Ranger groups and local schools.⁸³ The Grant Design Strategy and grant guidelines required that grant applications outline how communities have had input to the design of local activities. There is no requirement for First Nations people’s involvement in the assessment of grant applications unless Junior Rangers activities are conducted in a region with an Empowered Communities (see paragraph 2.26) joint decision-making process. The grant application assessment process included NIAA regional network staff and allowed for input from Empowered Community representatives if relevant. Grant assessors were required to confirm that students, communities and community groups supported the proposed activity, had participated in the planning and design of the proposed activity, and would be involved in delivery of the proposed activity.

Supporting the achievement of Closing the Gap outcomes

3.23 The ANAO examined a selection of grant guidelines (for all 33 grant programs) and a selection of 44 grant agreements (for the risk-based sample of five grant programs) (Appendix 9).⁸⁴

Department of Education

3.24 All six of Education’s relevant program grant guidelines established clear links between funded activities and Closing the Gap outcomes and supported monitoring and evaluation. The two programs assessed as part of the risk-based sample (Clontarf and Connected Beginnings) also had grant agreements that established clear links and supported monitoring and evaluation.

• Clontarf — Program objectives in the grant agreement include to ‘increase year 12 attainment and pathways to further training, education and the workforce’. Monitoring aligns with Closing the Gap Target 5, with a key performance indicator being the ‘number and proportion of year 10 and 12 students participating in the program who have attained their … certificate’. Evaluation requirements are included in the April 2023 grant agreement. Since its inception, 10 evaluations of Clontarf have been conducted including a cost-benefit analysis completed in 2024.⁸⁵
• Connected Beginnings — The standard grant agreement links funded activities with Closing the Gap Targets 3 and 4 and requires grant recipients to ‘comply with the Commonwealth’s reasonable requests, directions and monitoring requirements, in relation to the Activity and any Commonwealth review or evaluation of it’. A ‘mid-term evaluation’ of Connected Beginnings was published in 2023.⁸⁶

Department of Social Services

3.25 Both of DSS’s relevant program grant guidelines included clear links between funded activities and Closing the Gap outcomes. The grant guidelines for the Early Childhood Outreach Initiative also supported monitoring and evaluation.⁸⁷ First Nations Playgroups grant agreements had clear links between funded activities and Closing the Gap Target 4. Monitoring and evaluation was supported in the grant guidelines and monitoring but not evaluation was supported in the grant agreements. As community partner, SNAICC was contracted to conduct preliminary monitoring of ‘early-stage project progress’ in December 2024. DSS did not conduct further monitoring or evaluation of the First Nations Playgroups program, which runs until 2026.

National Indigenous Australians Agency

3.26 Of the 25 NIAA grants programs, two had program-specific grant guidelines and 23 used standing grant guidelines designed for broad application under the Indigenous Advancement Strategy.

• The program-specific grant guidelines for Junior Rangers and Girls Academies demonstrated clear links to Closing the Gap targets. The Junior Rangers Grant Design Strategy sets out a program logic connecting funded activities to Closing the Gap Targets 5, 7 and 15, and to Priority Reform 1.
• The standing ‘Local Investment Fund’ grant guidelines used for two grant programs (CS — Local Investment Fund and CAC Local Investments) did not include clear links between activities and specific Closing the Gap outcomes. The grant guidelines stated that the grant programs were connected to the Indigenous Advancement Strategy. The Indigenous Advancement Strategy broadly seeks to align investment with Closing the Gap targets.
• The 21 other grant programs assessed in Appendix 9 used standing Agency Collaborates grant guidelines.⁸⁸ The Agency Collaborates grant guidelines do not include clear links between grant program activities and specific Closing the Gap outcomes. Grant applicants are encouraged to consider how their proposed funded activities relate to one or more of the six Indigenous Advancement Strategy programs.⁸⁹ The NIAA has developed a ‘program logic’ that applies to the broader Children and Schooling Program 1.2. The NIAA advised the ANAO in February 2025 that it identifies and records which Closing the Gap targets grant agreements are expected to address in its internal grant management system after agreements have been finalised.
• All of the assessed grant guidelines, whether program-specific or for standing use in the Indigenous Advancement Strategy, supported monitoring by requiring reporting of relevant information and including evaluation participation requirements for grant recipients.

3.27 Grant agreements for the two NIAA grant programs in the risk-based sample established clear links and supported monitoring and evaluation.

• Junior Rangers — Sampled Junior Rangers grant agreements included a clear link between program activities and Closing the Gap Target 5 and had key performance indicators that support monitoring of progress toward Closing the Gap Target 5. Nine of the ten sampled grant agreements required grantee participation in evaluations if requested by the NIAA.
• Schooling Projects Operational — Sixteen of 18 sampled Schooling Projects Operational grant agreements included a clear link between program activities and Closing the Gap targets and had a requirement for monitoring of progress. Seven of the 18 sampled agreements facilitated participation in evaluation.

Strengthening the Aboriginal community-controlled sector

3.28 The parties to the National Agreement on Closing the Gap have agreed to increase the proportion of services delivered by Aboriginal and Torres Strait Islander organisations, particularly ACCOs, by implementing funding prioritisation policies.⁹⁰ The parties have committed under Priority Reform 2 to building the ACCO sector (see paragraph 1.13).

3.29 The 2021 Commonwealth Closing the Gap Implementation Plan (Implementation Plan) committed the Australian Government, in consultation with the Coalition of Peaks, to develop a business case to support an Indigenous grant-connected policy⁹¹, which was to be established by 2024. The Indigenous grant-connected policy was to preference Aboriginal and Torres Strait Islander organisations, particularly ACCOs, across all Australian Government grants where they met all other application requirements, including demonstrating value for money. The 2024 Implementation Plan Actions Status report described the action as ‘delayed’ and stated that the business case would be completed by 31 December 2025.⁹²

3.30 In 2023 the NIAA published the Closing the Gap — Grants Prioritisation Guide (Grants Guide)⁹³ to assist government entities to meet sector-strengthening commitments under Priority Reform 2. The Grants Guide states that it includes practices that can be applied by all Australian Public Service employees to design and administer competitive grant opportunities that prioritise funding to Aboriginal and Torres Strait Islander organisations, particularly ACCOs. The Grants Guide states it should be used for all competitive grant rounds (all population and Indigenous specific) where programs deliver services to Aboriginal and Torres Strait Islander people. It also states that when designing grants, agencies should consider how grants contribute to Closing the Gap targets and outcomes and consider applying one or more ACCO prioritisation practices. It states that agencies need to ensure the grant guidelines include relevant details about how the grants will contribute to Closing the Gap targets and outcomes and prioritisation approaches.

Strategy and planning for sector strengthening

3.31 In 2021 the Joint Council agreed to a Strategic Plan for Funding the Development of the Aboriginal and Torres Strait Islander Community-Controlled Sector (ACCO Strategic Plan). The ACCO Strategic Plan sought to inform how governments, working in partnership with the Coalition of Peaks, determine investment priorities for each of the priority service sectors and across Closing the Gap funding streams. The ACCO Strategic Plan identified priority areas for investment including strengthening peak bodies to support and build the capability of organisations in the early childhood care and development sector.

3.32 A Sector Strengthening Plan: Early Childhood Care and Development (the ECCD SSP)⁹⁴ was agreed in principle by Joint Council in 2021. The ECCD SSP stated its development was ‘informed by extensive consultations with [ACCOs] across Australia’ and aimed to achieve increased service delivery, coverage, capacity, quality and resources for ACCOs. The ECCD SSP identified 36 actions relating to workforce (10), capital infrastructure (4), service delivery (6), governance (5), funding models (7) and peak bodies (4). A 2023 review of the status of the ECCD SSP’s proposed actions identified that 29 of 36 did not have committed implementation funding.

3.33 In 2023 the NIAA developed a three-year Early Years and Education Sectoral Strategy (2023–2026) (Sectoral Strategy). Although the Sectoral Strategy seeks to increase the extent that processes led by other agencies (including the ECCD SSP and Commonwealth Early Years Strategy⁹⁵) include content and plans specific to First Nations people and circumstances, it does not explicitly address the proportion of grants funding provided to ACCOs.

3.34 The Empowered Communities program (see paragraph 2.26) theory of change⁹⁶ states that one key success factor is to establish and resource ‘regional enabling Indigenous organisations to strengthen the [ACCO] service sector, lead priority-setting, and broker and partner in policy development, program design and joint decision making for service investment’.

3.35 In April 2024 the NIAA commissioned IPS Management Consultants to develop an evaluation methodology for all Closing the Gap Sector Strengthening Plans.⁹⁷ The NIAA advised the ANAO in July 2025 that the Partnership Working Group (see paragraph 1.5) was due to consider the draft methodology at its August 2025 meeting.

Sector-strengthening in grants programs

3.36 Table 3.6 shows that one of the five grant programs (First Nations Playgroups) fully aligned with principle of sector strengthening, three partly aligned and one (Clontarf) did not align.⁹⁸

Table 3.6: Alignment of grant programs — Strengthening the ACCO sector

Key: ◆ Largely or fully ▲ Partly ■ Not aligned

Note a: The ANAO has adopted the categorisation used by the audited entities of an organisation as an Aboriginal and Torres Strait Islander organisation and/or as an ACCO.

Note b: This analysis based on the full population of 47 awarded grants.

Note c: This analysis is based on Agency Collaborates grant guidelines.

Note d: This analysis is based on the two largest Schooling Projects Operational grant agreements in monetary value awarded to non-Indigenous organisations.

Source: ANAO analysis of a risk-based sample of grant programs.

Clontarf

3.37 The grant guidelines did not include provisions for prioritising Aboriginal and Torres Strait Islander organisations. The grant agreement with the Clontarf Foundation did not include provision for transition to Aboriginal and Torres Strait Islander organisations.

3.38 Between April 2023 and April 2024, the Minister for Education considered and advised the government about other possible approaches to allocating program funding, including (in April 2024) the option of a competitive grants process. In November 2023, in preparation for a meeting with stakeholders, Education informed the Assistant Minister for Education about stakeholder concerns about the program, including concerns about transparency, consultation and partnership in funding decision-making and lack of similar funding opportunities for Indigenous organisations.

3.39 In the 2024–25 and 2025–26 Federal Budgets, government agreed to allocate $32.8 million and $33.6 million, respectively, to the Clontarf Foundation over two financial years, through closed non-competitive processes.

Connected Beginnings

3.40 Connected Beginnings grant applications are by invitation only. Connected Beginnings grant agreements and governance arrangements have increasingly incorporated transition to Aboriginal and Torres Strait Islander organisations over time. The Connected Beginnings grant guidelines did not address prioritisation of Aboriginal and Torres Strait Islander organisations.

• Ten Connected Beginnings sites were identified in 2016 by the Australian Government in consultation with state governments. In 2021 the Minister for Education and Youth approved an additional 27 sites. New and extended contracts in 2021 included clauses promoting ‘transition to ACCO Leadership’.
• From February 2022, the Connected Beginnings Advisory Group⁹⁹ advised on site selection. Objectives of the Connected Beginnings Advisory Group included ‘strengthening capacity and involvement of the community-controlled sector’.
• In 2022, SNAICC became the Connected Beginnings community partner and was contracted to provide end-to-end support (including advice, coaching and mentoring) to Connected Beginnings grant recipients from 2021–22 to 2024–25 as well as to Connected Beginnings ‘backbone’ organisations.
• In 2023, SNAICC and Education jointly developed the ACCO Leadership Transition Framework (ALTF). The ALTF was designed to facilitate the transition of Connected Beginnings leadership and backbone functions from non-Aboriginal and Torres Strait Islander organisations to ACCOs through a structured process. Application of the ALTF is a grant agreement requirement for all Connected Beginnings grantees. According to SNAICC:

this type of supported transition is a strong example of good practice in transitioning services to ACCOs. It demonstrates that by putting community and cultural leadership at the centre, compelling organisations to plan for transition through contract requirements and investing in transition, services can be quickly and effectively transitioned to ACCOs from non-Indigenous organisations.¹⁰⁰

3.41 As at October 2024 the Connected Beginnings Advisory Group anticipated other sites would apply the ALTF. By January 2025 the number of Connected Beginnings sites had grown to 50. Of these, 34 were led by an ACCO backbone organisation.

First Nations Playgroups

3.42 The grant guidelines stipulate that funding is exclusively for ACCOs or other Aboriginal and Torres Strait Islander organisations. In January 2024, SNAICC was contracted to provide a shortlist of ACCOs to be eligible for the program, and to provide capacity building support to these organisations. SNAICC shortlisted 19 organisations, all of which DSS invited to apply. Fourteen of the 19 ACCOs signed grant agreements and received funding.

Junior Rangers

3.43 The Junior Rangers grant guidelines include a section on the NIAA’s ‘Indigenous Preferencing Policy’, which outlines three tiers: ‘First Nations Organisations’; organisations with at least 50 per cent First Nations ownership, control or management; and any organisation ‘with a demonstrated commitment to increasing First Nations employment, supplier use and/or engagement’. A key selection criterion is that applicants should demonstrate ‘cultural competence’, including how they are accepted by the relevant community and how they propose to deliver culturally competent services to Aboriginal and Torres Strait Islander students. This preferences Aboriginal community-controlled and other Aboriginal and Torres Strait Islander organisations. As at May 2025, 42 of 47 grants were awarded to Aboriginal and Torres Strait Islander organisations. None of the grant agreements for the five grants awarded to non-Indigenous organisations included transition requirements.

Schooling Projects Operational

3.44 Agency Collaborates standing grant guidelines include provisions for prioritising Aboriginal and Torres Strait Islander organisations. Between July 2020 and September 2024, there were 162 active grants. Of these, 103 (64 per cent) were awarded to Aboriginal and Torres Strait Islander organisations. The total value of funding provided to Aboriginal and Torres Strait Islander organisations was $159 million (51 per cent), compared to $153 million provided to non-Indigenous organisations.¹⁰¹ Two of three largest value grants were awarded to non-Indigenous organisations and do not include provisions supporting transition to Aboriginal and Torres Strait Islander organisations.¹⁰² Seventy-six per cent of Schooling Projects Operational grant agreements in place in July 2025 were extensions of agreements in place at July 2020. Internal NIAA advice in March 2025 noted that:

the extension of large numbers of [Indigenous Advancement Strategy] grants over time … has created long-term expectations of ongoing funding and has created entry barriers to funding for alternative providers, including [ACCOs]. This has reduced investment flexibility in the [Indigenous Advancement Strategy] and its ability to respond to emerging critical needs and priorities.

Tracking and reporting of funding provided to ACCOs

3.45 None of the three entities publicly report on the proportion of grant funding provided to Aboriginal community-controlled or other Aboriginal and Torres Strait Islander organisations, although DSS and the NIAA monitor this internally.

• Education does not track the proportion of grant funding provided to Aboriginal and Torres Strait Islander organisations and as a result Education is not well placed to assess or evaluate the proportion of funding provided.
• DSS advised the ANAO in March 2025 that it tracks the proportion of grant funding provided to ACCOs for internal use, including to respond to inquiries and in anticipation of the planned grant connected policy. The Community Grants Hub¹⁰³ tracks three categories of Aboriginal and Torres Strait Islander grant recipients according to the extent they are community-controlled. DSS advised the ANAO in July 2025 that, as at January 2025, 145 ACCOs and 19 other Aboriginal and Torres Strait Islander organisations received grant funding from DSS across all departmental programs, representing 3.9 per cent of grants administered by DSS.¹⁰⁴ The extent to which DSS provides grant funding to ACCOs is not publicly reported.
• The NIAA monitors the proportion of funding provided to Aboriginal and Torres Strait Islander organisations though regular internal reporting. As at 25 February 2025 the proportion was reported to be 71 per cent on average across all NIAA programs and 58 per cent on average for Indigenous Advancement Strategy Program 1.2 (Children and Schooling) (55 per cent in 2020).

3.46 Clause 118 of the National Agreement on Closing the Gap requires annual reports to list the number of Aboriginal and Torres Strait Islander community-controlled organisations and other Aboriginal and Torres Strait Islander organisations that have been allocated funding and subject to confidentiality requirements, also list the names of the organisations and the amount allocated. The 2022 Australian Government Closing the Gap Annual Report did not identify the number of Aboriginal community-controlled or other Aboriginal and Torres Strait Islander organisations awarded Australian Government grant funding. The 2022 Annual Report attributed the lack of reporting to delays progressing a grant-connected policy (see paragraph 3.29) and a review of expenditure due in July 2022, and committed the Commonwealth to working with the Coalition of Peaks to develop approaches to give effect to the commitment by 2024. The 2023 and 2024 annual reports also did not identify the number. The NIAA did not advise the Minister for Indigenous Australians that the annual reports should include this information.

4.1 The Productivity Commission (PC) is responsible for developing, maintaining and publishing a data dashboard¹⁰⁵ and annual data compilation report¹⁰⁶ on progress towards the 17 socio-economic outcomes and 19 targets (see paragraph 1.9).¹⁰⁷ The National Agreement on Closing the Gap requires the parties to the agreement, which include the Australian Government, to publish annual progress reports.¹⁰⁸ The National Indigenous Australians Agency (NIAA) coordinates and publishes the Australian Government’s annual report, which is agreed by government and tabled in the Parliament.

Is dashboard information accurate and meaningful?

Target data governance and quality assurance

Data governance

4.2 The PC works with Joint Council (see paragraph 1.5) and other Closing the Gap governance bodies (Figure 4.1) to produce the data dashboard.

• Partnership Working Group (PWG) — The PWG was established by Joint Council and is comprised of representatives from each of the parties to the National Agreement on Closing the Gap. The PWG is co-chaired by the NIAA and the Coalition of Aboriginal and Torres Strait Islander Peak Bodies (Coalition of Peaks).
• Data Reporting Working Group (DRWG) — The DRWG provides technical advice to the PWG and instructs the PC on matters relating to the dashboard. The NIAA co-chairs with the Coalition of Peaks. DRWG membership includes Australian Government data custodians and other Australian Government entities. The PC has observer status.
• Data Development Plan — Individual Australian Government entities are responsible for delivering specific data as set out in a Data Development Plan, which is required under the National Agreement on Closing the Gap¹⁰⁹ and was endorsed by Joint Council in August 2022.¹¹⁰ Target 3 and 5 data is sourced from the Australian Bureau of Statistics (ABS) and Target 4 data is sourced from the Department of Education (Education).¹¹¹
• Data Policy Partnership — In June 2025 Joint Council endorsed the Data Policy Partnership¹¹², whose primary function is to make recommendations to Joint Council to progress Priority Reform 4 (see Table 1.1) and improve data on the priority reforms and socioeconomic outcomes, targets and indicators.¹¹³ The first meeting of the Data Policy Partnership was held on 16 October 2025.¹¹⁴

Figure 4.1: Closing the Gap target data governance

Note a: The Productivity Commission has observer status in the DRWG.

Note b: All papers for PWG consideration must be first considered by the Drafting Group.

Source: ANAO analysis based on the 2022 and 2023 Commonwealth Closing the Gap Annual Reports and PC documentation.

4.3 The PC uses Joint Council-endorsed data specifications (data sources and calculation methodologies) for targets and supporting indicators (see paragraph 4.18). Although it can advise Joint Council through the PWG, the PC advised the ANAO in April 2025 that any changes to the data specifications would require DRWG endorsement. Data specifications for Targets 3, 4 and 5 were endorsed by the DRWG in April 2021 prior to the initial dashboard being released in June 2021.

4.4 In addition to its advice to Joint Council via the PWG, the National Agreement on Closing the Gap requires the PC to produce a three-yearly progress review, which can include comments on the targets, supporting indicators and other data improvements. Joint Council provide advice to the Treasurer on the terms of reference for the three-yearly PC review.¹¹⁵

4.5 The data dashboard shows progress in meeting the 17 socio-economic outcomes and 19 targets and does not show progress towards the four priority reforms (see paragraph 1.11). In June 2023 the NIAA commissioned the Australia and New Zealand School of Government (ANZSOG) to conduct a review on how to measure and report on progress in achieving the priority reforms. The final report was provided by ANZSOG to the NIAA on 19 August 2024 and was discussed at PWG in March 2025, at which it was agreed to refer detailed consideration of the priority reforms measurement framework to the Data Policy Partnership, for advice back to PWG by the end of 2025.

Productivity Commission processes

4.6 The PC maintains clear records of its data calculation methodology and, for all three targets, the PC published the data specifications on the dashboard.¹¹⁶ This enables First Nations stakeholders and others to recalculate the results and conduct additional disaggregated analysis.

4.7 The PC’s processes for publishing Target 3, 4 and 5 results on the dashboard are supported by 18 guideline documents. The guideline documents were not endorsed or version controlled and while there was evidence of updates, the PC had no process for systematic review of the guideline documents. The PC had a handbook for its database which comprised 17 documents describing the use and management of the database.

4.8 Auditor-General Report No. 27 2018–19 Closing the Gap analysed target reporting under the National Indigenous Reform Agreement (NIRA) (see paragraph 1.1). The audit found that the PC did not have an overarching quality assurance framework and stated the PC should document its quality assurance processes to ensure they are consistently followed and reporting is accurate.¹¹⁷ The PC has not documented a process for validating the import and analysis of data. In October 2024 the PC documented its quality assurance processes in a draft ‘guidance’ document, which does not describe the whole data quality assurance process.

Accuracy of dashboard information

4.10 Following the PC’s documented calculation methodology, the ANAO was able to replicate the target results published on the data dashboard for Targets 3, 4 and 5.¹¹⁸

Meaningfulness of dashboard information

4.11 Table 4.1 shows Target 3, 4 and 5 results for Australia as a whole, as reported on the data dashboard in June 2025.

Table 4.1: Dashboard reporting for Targets 3, 4 and 5 (Australia), as at 1 June 2025^a

Note a: On 30 July 2025 the PC updated the data dashboard for Targets 3 and 4 based on 2021, instead of 2016, Census data and other refreshed data. The national result for Target 3 was 94.2 per cent (‘on track’) and the national result for Target 4 was 33.9 per cent (‘worsening’). The Target 3 results for the Australian Capital Territory, Tasmania, Victoria and Western Australia remained over 100 per cent (120.7, 110.1, 121.2 and 101.7 per cent, respectively). Available from https://www.pc.gov.au/closing-the-gap-data/dashboard/se/outcome-area3 [accessed 31 July 2025].

Source: ANAO analysis of Productivity Commission, Closing the Gap Targets and Outcomes, available from https://www.closingthegap.gov.au/national-agreement/targets [accessed 1 June 2025].

Data clarity

4.12 The Target 3 result (101.8 per cent¹¹⁹ in June 2025 and 94.2 per cent in July 2025) was used to describe enrolment in preschool as ‘improving and on track’.

• As noted in Appendix 10, Target 3 uses different data sources for the numerator (2023 Preschool Education Australia dataset) and the denominator (2016 Census, updated to 2021 Census in July 2025). The numerator estimate is based on the number of enrolments. The denominator is based on the estimated and projected number of relevant children in the estimated resident population in a given year. The mismatched analysis units can lead to a result exceeding 100 per cent and a potentially incorrect conclusion that the target is on track.
• The different data sources for Target 3 are from different time periods, further exacerbating an unclear result. In January 2025 the PWG agreed to use 2021 (instead of 2016) Census population estimates (to be implemented from July 2025), partly improving target result clarity. In relation to its use of the 2016 Census until June 2025, the PC stated on its website that:

ABS projections from the 2016 Census for selected indicators … are the best available data, however they underestimate the number of Aboriginal and Torres Strait Islander people in the years after the 2016 Census.¹²⁰

4.13 The use of more recent Census data to develop estimates was expected to improve the meaningfulness of Target 3 at the national level although the underlying problem is not fixed and some sub-national estimates continue to exceed 100 per cent. Target 3 data specifications were established under the NIRA. In 2023 the PC commissioned the Australian National University to review the data specifications for all targets (ANU review).¹²¹ The November 2024 ANU review report recommended the numerator and denominator for Target 3 be derived instead from the Person Level Integrated Data Asset (PLIDA)¹²², ‘to avoid the biased and at times mathematically impossible observations that result from the numerator-denominator mismatch.’¹²³ The ANU review report stated that:

issues of cultural safety and relevance of the data (rather than the method) were not within the scope of the project. However, we believe that they are fundamental and so wish to bring them to the attention of the PWG and the Productivity Commission.

4.14 As at June 2025 the PWG had not considered the recommendations of the ANU review to use PLIDA.¹²⁴

Data currency

4.15 Under the National Agreement on Closing the Gap, the PC is required to update the dashboard at least annually.¹²⁵ The PC has updated the dashboard at above the required frequency. Following first publication in June 2021, there were two updates in 2022 (March and June), two updates in 2023 (March and June), three updates in 2024 (March, July, and November) and, as at August 2025, two updates in 2025 (March and July).

4.16 There is no requirement in the National Agreement on Closing the Gap for the frequency of updates to individual target data. In practice, reflecting the characteristics of the PWG-approved data sources, the frequency of data collection, the time between data collection and public release by the data custodian, and other PWG decisions, as at June 2025 Target 3 had been updated annually and Targets 4 and 5 had been updated once since the National Agreement was established in 2020. The PC does not have early access to data holdings. The PC provides transparent information on its website about target data currency, and partial explanations for its use of outdated data (Appendix 10).

4.17 The ANU review made recommendations to improve the currency of Targets 4 and 5. For Target 4, the ANU review recommended greater resourcing of the Australian Early Development Census to allow the survey to be conducted biennially rather than every three years. For Target 5, the ANU review recommended annual monitoring using PLIDA data to increase the currency of the progress assessments.

Contextual and explanatory information

4.18 In addition to the socio-economic outcomes, targets and priority reforms, the National Agreement on Closing the Gap includes specifications for ‘supporting indicators’ and analysis disaggregation to supplement the outcome and target information.

• Supporting indicators — Supporting indicators are intended to provide ‘greater understanding’ and ‘insight’ into how governments are tracking against the targets, and are divided into ‘drivers’ and ‘contextual information’.¹²⁶ The National Agreement on Closing the Gap lists three supporting indicators for Target 3, five for Target 4 and seven for Target 5 (see Table 4.2).
• Disaggregation — Disaggregation is needed to ‘understand where progress is being made and where greater effort is needed’. Disaggregation for Targets 3, 4 and 5 comprises analysis by: state / territory, remoteness areas, socio-economic status of the locality, and gender. For Target 5 there are two additional disaggregation variables: disability status, and year 12 versus Certificate III or above.

4.19 As at June 2025, four of the 15 supporting indicators relevant to Targets 3, 4 and 5 were reported on the PC’s dashboard (Table 4.2), with a fifth introduced in July 2025. The supporting indicator specifications (methodology and data sources) are not defined in the National Agreement on Closing the Gap. The PC advised the ANAO in April 2025 that the PWG decides which supporting indicators will be developed and progressed each year. In a 2024 public webinar a Productivity Commissioner stated that¹²⁷:

We currently only report on 31 out of the 164 supporting indicators included in the national agreement, which is only a portion of those outlined in the agreement itself. We are working with the parties to the agreement to develop the supporting indicators to expand the range of indicators that are reported on each year. This requires a lot of effort on both sides, including jurisdictions making that data available.

Table 4.2: Reported supporting indicators for Targets 3, 4 and 5, as at June 2025

Key: ◆ Reported ▲ Partly reported ■ Not reported

Note a: Aboriginal community-controlled services and government and/or non-Indigenous controlled services were reported from 2022 to 2023. Data quality considerations state that data is not currently available for government and/or non-Indigenous controlled services that do not receive funding via the Australian Government’s childcare subsidy system or Community Childcare Fund (such as state and territory government funded preschool services).

Note b: The dashboard states that unreported supporting indicators are ‘under development’.

Note c: The 30 July 2025 update to the Closing the Gap data dashboard included a supporting indicator for school attendance.

Note d: The percentages presented in this supporting indicator are calculated by the Australian Curriculum Assessment and Reporting Authority.

Source: ANAO analysis of PC dashboard update documentation.

4.20 Required disaggregation reporting is complete except for disability status for Target 3, for which there is partial reporting (Table 4.3).

Table 4.3: Reported disaggregation, as at June 2025

Key: ✔ Fully reported ✘ Not fully reported

Note a: Results are prepared for some jurisdictions for some years.

Note b: Disability disaggregation for Targets 3 and 4 was not specified in the National Agreement, however the PC proposed reporting disability status for Targets 3 and 4 to the PWG and it was agreed in September 2021.

Note c: Year 12 versus Certificate III or above completions (Certificate III but without year 12).

Source: ANAO analysis.

4.21 In October 2023 the PWG endorsed a PC proposal to include historical and ongoing context as part of the data dashboard and annual data compilation report. The inclusion of context aims to improve cultural safety and provide a more complete understanding of the data. As at June 2025 the inclusion of this additional context was implemented for Targets 3 and 5, which involved consultation with the PWG and SNAICC — National Voice for our Children (SNAICC).

Data limitations

4.22 The target data specifications set out on the dashboard include the data source, data provider, baseline year, target reporting period (latest data year), computation, and data quality considerations. The PC provides explanations of some data limitations for the three targets. In relation to the anomalous result for Target 3 (see paragraph 4.11), the PC states, ‘Enrolment proportions may exceed 100% for some areas due to the numerator and denominator being from different sources’.¹²⁸

Is annual reporting accurate, complete and meaningful?

4.23 Clause 118 of the National Agreement on Closing the Gap requires:

The Parties agree to make public information on their progress on the Agreement and their Implementation Plans through annual public reports, The annual public reports will:

a. draw from the dashboard and annual PC data compilation report, to ensure consistency of measures of progress

b. include information on efforts to implement this Agreement’s four Priority Reform areas, particularly outlining how implementation aligns with the principles for action

c. demonstrate how efforts, investment and actions are aligned and support the achievement of Closing the Gap goals

d. list the number of Aboriginal and Torres Strait Islander community-controlled organisations and other Aboriginal and Torres Strait Islander organisations that have been allocated funding for the purposes of Clause 24, 55a and 55b, and 135 of this Agreement; and subject to confidentiality requirements, also list the names of the organisations and the amount allocated.¹²⁹

4.24 Under the 2019 Executive Order to Establish the National Indigenous Australians Agency as an Executive Agency, the NIAA’s functions include to ‘lead and coordinate the development and implementation of Australia’s Closing the Gap targets in partnership with Indigenous Australians’. The NIAA coordinates, compiles and advises the Australian Government on its annual report. The final content included in the Australian Government annual report is a decision of the Australian Government.

4.25 The Australian Government has produced a Closing the Gap annual report each year since 2022. In each year, the NIAA compiled a draft report based on contributions from Australian Government entities for the Minister for Indigenous Australians (the Minister). A lessons learned exercise following the 2023 process highlighted a lack of clarity in ownership of sections of the report, a need for improved central coordination by the NIAA and a need to establish a drafting plan that was adhered to. Of 12 entities providing lessons learned feedback, seven made comments that the NIAA needed to provide stronger leadership and guidance on the drafting and/or ministerial clearance process. Three made comments about better and earlier engagement of Aboriginal and Torres Strait Islander peak organisations in the process. In contrast to the process for 2023, for the 2024 report the NIAA prepared the first draft and requested comments from entities. Between February and May 2025, the NIAA conducted a feedback survey with Australian Government entities, to which 11 entities responded. A summary prepared by the NIAA stated that seven of the 11 responding entities considered the 2024 Closing the Gap Annual Report process to be at least satisfactory and three considered the process to be poor. Opportunities for improvement included improved: collaboration between entities; communications and information gathering and sharing; clearance requirements and timeframes to better support collaboration with peak partners. The Coalition of Peaks was not invited to participate in the survey.

Accuracy of annual target reporting

4.26 The Australian Government 2022 Annual Report¹³⁰ accurately presented socio-economic target results that match those in the PC’s 2022 Annual Data Compilation Report, with a minor difference in the terminology used to describe Target 4 status.¹³¹ The 2023 Annual Report¹³² provided identical target status results to those in the 2023 Annual Data Compilation Report. The 2024 Annual Report¹³³ did not include target results or status.

Completeness of annual reporting

4.27 When preparing the Australian Government 2022 Annual Report, a brief to the NIAA Chief Executive Officer from the Closing the Gap Branch stated that, in order to meet commitments under the National Agreement on Closing the Gap, the annual report would ‘at a minimum’ need to comply with Clause 118 of the agreement (see paragraph 4.23).

4.28 The 2022 Annual Report included the following information for Targets 3, 4 and 5:

• socio-economic outcome description;
• target description — targets described in full;
• baseline — baseline figures for the targets and the baseline year;
• target result — latest target percentage results;
• target result date — the date of the data source from which the target result was derived;
• target status — ‘on track’, ‘not on track’, or ‘no new data to assess progress’;
• overview sections outlining the importance of the targets;
• last target update dates;
• some data limitations¹³⁴; and
• a list of Australian Government actions contributing to progress.

4.29 Since the 2022 Annual Report, for Targets 3,4 and 5, the completeness of target information included in the annual report has declined (Table 4.4), reducing transparency over outcome progress for schooling and early childhood development commitments.

Table 4.4: Australian Government annual report target reporting, 2022 to 2024

Key: ◆ Reported ▲ Partly reported ■ Not reported

Note a: ‘On track’, ‘not on track’, ‘worsening’, ‘no new data to assess progress’, ‘good improvement and on track’, ‘worsening, not on track’, or ‘improvement but not on track’.

Note b: The 2023 Annual Report includes the socio-economic outcomes and does not include the targets. For example, for Target 3, the socio-economic outcome is that Aboriginal and Torres Strait Islander children are engaged in high quality, culturally appropriate early childhood education in their early years. Targets include a goal, such as to increase the proportion of Aboriginal and Torres Strait Islander children enrolled in Year Before Fulltime Schooling early childhood education to 95 per cent, and the target year to achieve the goal.

Source: ANAO analysis of tabled Australian Government Closing the Gap annual reports.

4.30 For the 2023 Annual Report, the NIAA provided the Minister with a draft for approval that did not include the target descriptions or results nor advise that clause 118 of the National Agreement requires the Australian Government’s annual report to ‘draw from the dashboard and annual PC data compilation report, to ensure consistency of measures of progress’.

4.31 For the 2024 Annual Report, the NIAA provided the Minister with drafts in October and November 2024 that did not include the Target 3, 4 and 5 results, but did include ‘traffic lights’ showing the statuses for Targets 3 (‘good improvement and on track’), 4 (‘worsening not on track’) and 5 (‘improvement but not on track’). On 17 December 2024 the Minister, through her office, suggested that the NIAA exclude the traffic light information, stating that reporting target status was the responsibility of the PC. The Minister, through their office, suggested ‘noting in the actions taken in 2024 or priorities for 2025 how targets are tracking as part of the context for why certain actions are being/will be taken’. The NIAA did not advise the Minister about clause 118. The tabled report excluded target results and status.

4.32 The NIAA advised the ANAO in July 2025 that:

Progress reporting for early childhood development and schooling Closing the Gap socioeconomic targets is broader than the Commonwealth’s Closing the Gap Annual Report. Activities contributing to early childhood development and schooling are also demonstrated in departmental annual reports, policy partnership annual reports, and state and territory annual reports. Through these processes there has [sic] been attempts to reduce duplication.

4.33 However, the National Agreement on Closing the Gap clearly states that the Australian Government must report on its overall progress against targets at the national level in its annual report.

Meaningfulness of annual reporting

4.34 In 2024 the PC’s three-yearly Review of the National Agreement on Closing the Gap found that implementation plans and annual reports were not fulfilling the intended purpose.¹³⁵ The review found that the two documents did not reconcile (annual reports contained a limited set of the actions that governments had committed to and reported on actions not listed in the Closing the Gap implementation plan). The review found that reporting on progress was high level or incomplete, and delivery risk and issues were not included. The PC concluded:

By and large, the annual reports focus on listing activities that have been undertaken, while giving significantly less attention to describing what has not been delivered as planned and areas where there has been little progress. ¹³⁶

4.35 All Australian Government Closing the Gap annual reports include ‘key achievements’ (Appendix 11).

• The 2022 Annual Report listed 15 key achievements linked to Targets 3, 4 or 5, of which two considered progress over time, and three discussed lessons learned.
• The 2023 Annual Report listed 11 key achievements, of which two considered progress over time, and one discussed lessons learned.
• The 2024 Annual Report listed six key achievements, of which two considered progress over time, and two provided discussed lessons learned. However, in 2024, for the first time, the NIAA separately published a more comprehensive list of progress against 2024 Implementation Plan commitments, a link to which is available on the 2024 Annual Report webpage.¹³⁷

Appendix 1 Entity responses

Department of Education

Department of Social Services

National Indigenous Australians Agency

Productivity Commission

SNAICC — National Voice for our Children

Appendix 2 Improvements observed by the ANAO

1. The existence of independent external audit, and the accompanying potential for scrutiny improves performance. Improvements in administrative and management practices usually occur: in anticipation of ANAO audit activity; during an audit engagement; as interim findings are made; and/or after the audit has been completed and formal findings are communicated.

2. The Joint Committee of Public Accounts and Audit (JCPAA) has encouraged the ANAO to consider ways in which the ANAO could capture and describe some of these impacts. The ANAO’s corporate plan states that the ANAO’s annual performance statements will provide a narrative that will consider, amongst other matters, analysis of key improvements made by entities during a performance audit process based on information included in tabled performance audit reports.

3. Performance audits involve close engagement between the ANAO and the audited entity as well as other stakeholders involved in the program or activity being audited. Throughout the audit engagement, the ANAO outlines to the entity the preliminary audit findings, conclusions and potential audit recommendations. This ensures that final recommendations are appropriately targeted and encourages entities to take early remedial action on any identified matters during the course of an audit. Remedial actions entities may take during the audit include:

• strengthening governance arrangements;
• introducing or revising policies, strategies, grant guidelines or administrative processes; and
• initiating reviews or investigations.

4. In this context, the below actions were observed by the ANAO during the course of the audit. It is not clear whether these actions and/or the timing of these actions were planned in response to proposed or actual audit activity. The ANAO has not sought to obtain assurance over the source of these actions or whether they have been appropriately implemented.

• In October 2024, the Productivity Commission (PC) documented elements of its quality assurance processes relating to the publication of content on the Closing the Gap dashboard in a draft guidance document (see paragraph 4.8).
• In November 2024, the National Indigenous Australians Agency (NIAA) developed the Policy Partnership Evaluation Guideline Statement of Requirement to guide policy partnerships tendering for the development and implementation of an evaluation methodology (see paragraph 2.3).
• In January 2025, the NIAA developed terms of reference for the Queensland Place-Based Working Group (see paragraph 2.31).
• In February 2025, the Department of Education (Education) finalised terms of reference for the Indigenous Education Consultative Meeting (see paragraph 2.9).
• In March 2025, Education signed a partnership agreement with the Secretariat of National Aboriginal and Islander Child Care — National Voice for Our Children (see paragraph 2.8).
• In March 2025, Education signed a partnership agreement with the National Aboriginal and Torres Strait Islander Education Corporation (see paragraph 2.8).
• In June 2025, the Australian Public Service Commission (APSC) published the First Nations Partnership Playbook (see paragraph 2.7).

Appendix 3 Glossary

Appendix 4 Elements of ‘strong partnership’ under the National Agreement on Closing the Gap

1. The table shows the elements of ‘strong partnership’ set out in clause 32 of the National Agreement on Closing the Gap, and those elements that were assessed by the ANAO for the Early Childhood Care and Development Policy Partnership (ECCDPP) and other partnership arrangements for schooling and early childhood development.

Table A.1: ‘Strong partnership’ elements of the National Agreement on Closing the Gap

Source: Clause 32 of the National Agreement on Closing the Gap.

Appendix 5 Assessment of bilateral partnership arrangements

1. The NATSIEC partnership agreement was established in 2025 between the Department of Education (Education) and the National Aboriginal and Torres Strait Islander Education Corporation (NATSIEC).

Table A.2: NATSIEC partnership agreement — Alignment with relevant ‘strong partnership’ principles

Key: ◆ Largely or fully aligns with the strong partnership element ▲ Partly aligns ■ Does not align

Note a: The NATISEC Partnership Agreement is available on Education’s website at https://www.education.gov.au/closing-gap/resources/formal-partnership-agreement-australian-government-department-education-and-natsiec.

Note b: The Education Ministers Meeting is a forum for collaboration and decision-making on early childhood education and care, school education, higher education and international education. Australian state and territory government ministers responsible for education attend the meeting.

Source: ANAO analysis.

2. The SNAICC partnership agreement was established in 2025 between Education and SNAICC — National Voice for our Children (SNAICC).

Table A.3: SNAICC partnership agreement — Alignment with relevant ‘strong partnership’ principles

Key: ◆ Largely or fully aligns with the strong partnership element ▲ Partly aligns with the strong partnership element ■ Does not align with the strong partnership element

Note a: The SNAICC partnership agreement is available on Education’s website at https://www.education.gov.au/closing-gap/resources/formal-partnership-agreement-australian-government-department-education-and-snaicc-national-voice.

Source: ANAO analysis

Appendix 6 Evaluation of partnership arrangements for early childhood development

Table A.4: Evaluation of Closing the Gap partnership arrangements relating to early childhood development, as at June 2025

Note a: NIAA, Commonwealth Closing the Gap 2022 Annual Report, NIAA, 2022, pp. 133-135, available from https://www.niaa.gov.au/sites/default/files/documents/publications/niaa-closing-the-gap-annual-report-2022.pdf [accessed 30 June 2025].

Note b: NIAA, 2023 Closing the Gap Commonwealth Partnership Stocktake, NIAA, available from https://webarchive.nla.gov.au/awa/20241019092022/https://www.niaa.gov.au/our-work/closing-gap/ 2023-closing-gap-commonwealth-partnership-stocktake [accessed 25 June 2025].

Note c: NIAA, Closing the Gap Commonwealth 2024 Annual Report and Commonwealth 2025 Implementation Plan, NIAA, 2025, p. 19, available from https://www.niaa.gov.au/sites/default/files/documents/2025-02/NIAA%20CTG%20Combined%20Report.pdf [accessed 30 June 2025].

Note d: Coalition of Peaks, Independent Aboriginal and Torres Strait Islander-Led Review of Closing the Gap, June 2025, pp. 19, 73, 75–76, available from https://www.coalitionofpeaks.org.au/independent-review-of-closing-the-gap [accessed 27 June 2025].

Source: ANAO analysis.

Appendix 7 Grant programs related to Targets 3, 4 and 5

1. The following table shows grant programs relevant to Targets 3, 4 and 5, as at September 2024.¹³⁸ The universe of 44 grant programs (comprising 749 individual grant agreements valued at approximately $1.49 billion) was identified to the ANAO by the Department of Education (Education), Department of Social Services (DSS) and National Indigenous Australians Agency (NIAA) as relevant to Closing the Gap Targets 3, 4 and/or 5. The total values presented in the table represent the approximate cumulative value of funding committed in grant agreements between July 2020 and September 2024.

2. From this universe, a population of 33 grant programs (comprising 726 individual grant agreements approximately valued at $1.25 billion) was assessed by the ANAO as seeking to directly impact Closing the Gap Targets 3, 4 and/or 5 through funding services for Aboriginal and Torres Strait Islander people. Grant programs not exclusively for Aboriginal and Torres Strait Islander people were excluded from the population.

3. A risk-based sample of five grant programs (comprising 267 individual grant agreements approximately valued at $614 million) was selected for more detailed analysis. This sample was selected on the basis of financial materiality, the number of grant agreements supported and commentary about programs received or observed by the ANAO.

Appendix 8 Profile of selected grant programs

Table A.6: Selected grant programs related to Targets 3, 4, and 5

Note a: The Clontarf Foundation is a not-for-profit organisation incorporated as an unlisted public company limited by guarantee under the Corporations Act 2001.

Note b: Department of Education, Connected Beginnings, Education, 2025, available from https://www.education.gov.au/early-childhood/providers/extra-support/community-child-care-fund/connected-beginnings [accessed 17 June 2025].

Note c: National Indigenous Australians Agency, Creating Parity — the Forrest review, NIAA, 2014, available from https://www.niaa.gov.au/resource-centre/creating-parity-forrest-review [accessed 17 June 2025].

Note d: Indigenous ranger groups are made up of Aboriginal and Torres Strait Islander people who protect and manage their land, sea and culture.

Note e: The NIAA advised the ANAO In July 2025 that some funding for Junior Rangers activities was provided through Indigenous Advancement Strategy Program 1.2 Children and Schooling prior to the formal grants rounds that related to dedicated budget measures.

Source: ANAO analysis.

Appendix 9 Assessment of grant programs enabling monitoring and evaluation

1. The ANAO examined a selection of grant opportunity guidelines (grant guidelines) (for 33 grant programs linked to Targets 3, 4 and 5) and a selection of 44 grant agreements (for the risk-based sample of five grant programs), for evidence of:

• a link between grant activities and Closing the Gap Targets 3, 4 and/or 5, which could be articulated through a program logic (see note b to Table 3.2) developed for the grant program and through explanatory material in grant guidelines and/or grant agreements; and
• consideration of monitoring and evaluation, which could be established through requirements in grant guidelines and grant agreements for grantees to provide performance monitoring data and to participate in evaluations when requested.

Appendix 10 Data specifications and currency for Targets 3, 4 and 5

Figure A.8: Data specifications for Targets 3, 4 and 5, as at June 2025

Note a: Estimates and projections are based on the 2016 Census of Population and Housing. There was a more recent Census conducted in 2021.

Note b: The data is collected within a reference period in each jurisdiction using administrative data that is provided by the Department of Education (Education) from the Child Care Subsidy System. The states/territories and Education collect relevant data on the first Friday in August each year. The data set is also used for reporting on Education’s Preschool Reform Agreement and the PC’s Report on Government Services, although the measures reported differ from Closing the Gap targets. Australian Bureau of Statistics, Preschool Education, ABS, 2025, available from https://www.abs.gov.au/statistics/people/education/preschool-education/2024 [accessed 11 June 2025].

Note c: The methodology involves statistical linear least squares regression analysis based on the baseline target result and the latest target result. The regression model is used to predict a result.

Note d: The AEDC is a survey run triennially since 2009, with data collection, analysis and reporting contracted by Education to the Social Research Centre at the Australian National University. The survey includes approximately 100 questions across the five domains, which are answered for each individual student by their teacher.

Source: ANAO analysis of Closing the Gap Dashboard and target/indicator specifications.

Appendix 11 Closing the Gap Annual Report information on key achievements