Penalties should be imposed on states and territories that fail to make progress on Closing the Gap targets, according to Australia's Minister for Indigenous Australians, Senator Malarndirri McCarthy.
The Closing the Gap agreement, signed in 2020 by all states and territories under then-Indigenous Affairs Minister Ken Wyatt, did not include funding arrangements — something Senator McCarthy described as "problematic" during Senate estimates on Tuesday morning.
Senator Lidia Thorpe questioned the lack of oversight, saying that more than three years into the Labor government, "there's still no accountability or transparency around Closing the Gap money going to states and territories on what they're spending it on, and we have a gap that's never going to close".
In response, Senator McCarthy said stronger accountability mechanisms were needed, acknowledging that there is currently "no penalty in the agreement".
"I'm trying to look at federal funding arrangements with each state and territory over whatever the agreement might be as to how we can input into that so that there is some kind of penalty as to why you're not achieving targets," she said.
"Closing the gap funding is not actually a part of the agreement; this is what we've got to manoeuvre now in terms of the federal funding arrangements and that's what I want to see happen going forward, so there can be levers pulled to ensure targets are being met."
The Minister did not specify what penalties might look like or when they would be introduced.
Data released in July revealed that just four of the 19 Closing the Gap targets are on track to be met. Outcomes are worsening in four key areas: adult imprisonment (Target 10); children in out-of-home care (Target 12); suicide (Target 14); and early childhood development across all five domains of the Australian Early Development Census (Target 4).
Some states and territories — particularly Queensland and the Northern Territory — have openly dismissed aspects of the agreement when they conflict with political priorities.
At the Standing Council of Attorneys-General meeting in Sydney in August, federal Attorney-General Michelle Rowland pressed jurisdictions over rising Indigenous incarceration rates.
Queensland's Attorney-General, Deb Frecklington, reportedly told the meeting the LNP government "won't be changing anything" when it comes to reforming laws that allow children as young as ten to be held in adult watch houses or sentenced to life in prison for certain offences.
The Northern Territory's Attorney-General also defended the CLP's hardline approach, saying that while Closing the Gap was important, it "could not come at the expense of community safety." She pointed to a suite of CLP policies that have driven record incarceration rates — particularly among Aboriginal people, many of whom are on remand.
In New South Wales, recent bail law changes have significantly increased the number of Aboriginal children in custody, while Victoria — which has introduced a landmark Treaty bill — passed what it called the "toughest" bail laws in the country earlier this year, defying expert advice.
Aboriginal and human rights groups have long urged the Commonwealth to tie funding to compliance with the Closing the Gap agreement.
In August, the family of the late NT Supreme Court Justice James Henry Muirhead AC QC called on the Prime Minister to intervene in the Northern Territory — where almost 80 per cent of the budget is federally funded — describing the CLP government's approach as "regressive actions".
