Canberra's most senior public servant has urged his colleagues to relinquish power over Indigenous funding decisions and allocations to First Nations communities themselves.
Professor Glyn Davis, who is secretary of the Department of Prime Minister and Cabinet, told the Institute of Public Administration Australia on Tuesday that giving Indigenous communities budgets and control over their employment, health and housing services would close the gap better than Canberra bureaucrats.
In the wake of the failed Voice referendum, the federal public service boss told sector leaders he expected a more hybrid delivery of Indigenous services to evolve after repeated failures of private models tackling Indigenous disadvantage.
Professor Davis said that after 40 years of increased outsourcing, the future of public administration was now up for debate.
"Empowered communities provide a vital way to address consistent program failure," he said.
"We will never close the gap if public servants in Canberra think we can solve the housing, employment and educational challenges of (Indigenous communities).
He cited Papunya, a community 240 kilometres from Alice Springs, as an example of why a change in thinking and approach was needed.
"The women and men of Papunya have very clear ideas about what their community needs," he said.
"They are frustrated by the lack of coordination between levels of government and by poorly directed investment.
"They are ready to lead. What they want is a say in local decisions."
Professor Davis' comments follow a damning Productivity Commission draft report on the Closing the Gap Indigenous program, which was highly critical of federal attempts to work more collaboratively with communities.
The report described engagement as "tokenistic", citing unrealistic time frames for meaningful community input from agencies, who provided limited feedback on how input had shaped policy decisions.
ACT senator David Pocock recently echoed the sentiment of Professor Davis in an article published by InnovationAus.
The former Wallaby wrote of a "pattern of behaviour" where big companies establish SME arms and majority Indigenous-owned subsidiaries to make them eligible for procurement opportunities targeted at these particular companies.
"PwC Indigenous Consulting, for instance, has won $51.81 million in AusTender-listed government contracts since the Indigenous Procurement Policy was introduced in 2015," Mr Pocock wrote.
"We have government-wide procurement targets for Australian SMEs in our Commonwealth Procurement Rules (CPRs).
"But we don't have a process in place to guarantee that the public servants making the procurement decisions actually know whether or not they are dealing with an Australian SME when inviting a company to bid on — or when awarding — a government contract."
Former WA Governor and long-time prominent QC, Malcom McCusker, said before the Voice referendum the Federal government should focus first on how to improve the efficiency of the National Indigenous Australian Agency - the federal department responsible for annually allocating the billions of dollars in federal funding of Indigenous services.
The Noongar Chamber of Commerce and Industry also recently expressed concern at the "massive problem" with how funding for First Nations services was spent across the country, at state and federal levels.
NCCI chief executive Tim Milsom told the National Indigenous Times on the eve of the referendum the whole system needed a shake-up.
"There's hundreds of billions of dollars being spent on Aboriginal policy and none of it gets to Aboriginal people," he said.