Michael Mansell says "throwing money" at underlying causes of the gap between Indigenous and non-Indigenous Australians "has achieved nothing", while saying leaving Aboriginal land returns as the responsibility of state governments has "hamstrung" federal action.

The Tasmanian Aboriginal community member says the federal government has failed to make inroads into Indigenous disadvantage under the Close the Gap scheme, arguing the amount of money the Commonwealth has allocated to closing the gap targets "is an admission that the underlying causes of disadvantage (domination, dispossession and high incarceration rates) have been ignored".

Mr Mansell's perspective comes following the latest annual Closing the Gap report, where on Monday Prime Minister Anthony Albanese - while conceding just five of 19 targets were considered on track - said his government would invest in a range of new measures to help close the disadvantage gap between Indigenous and non-Indigenous peoples.

They include new laundries in remote communities, capping the price of 30 essential items in 76 remote community stores across Australia and building on previously announced investment from the government into Indigenous communities - especially across the NT and WA - focussing on housing, jobs, and restorative justice, such as the $707 million Remote Jobs and Economic Development (RJED) program.

Mr Mansell said the federal government's policy lacked self-determination for Indigenous people, disregarded land returns and failed to couple structural adjustments with funding allocations.

"In the last year the Commonwealth should have legislated to return land (Target 15) to Aboriginal communities but has entirely left this target to the States with the result of no action," he said.

"Instead to the Commonwealth needed to take steps to give Aboriginal responsibility in the Territory and in other discrete communities for community controlled education, housing, land use and planning and social behaviour (targets 7, 8 and 17), but instead continues throwing millions of dollars over 6 years in the Territory without any attempt at structural change.

"As a result, nothing has changed to close the gap."

Speaking on Monday, Mr Albanese said "If we get it right, we can break the cycle that has ensnared generations".

"Today is about facing up to what's not working and learning from what is the success stories in this report have been written by Aboriginal and Torres Strait Islander people themselves," he said.

Mr Mansell said the federal government has failed Aboriginal people on multiple fronts, including state jurisdictions in Aboriginal justice initiatives.

"The Commonwealth could reduce the high incarceration rates by insisting States provide for alternatives to imprisonment for adults and youth (targets 10 and 11) backed by Commonwealth funded alternatives for courts to bail Aboriginals into. No effort has been made to address this issue," Mr Mansell said.

"Prime Minister Albanese has been a weak leader in this area. He engaged in abstract constitutional recognition that would not have delivered a handful or soil, a grain of empowerment or kept a single Aboriginal out of prison even if the proposal had been successful."

Speaking in the Senate, Minister for Indigenous Australians, Malarndirri McCarthy said she wanted to be "crystal clear" that "the Albanese government is ambitious for Indigenous Australians…[but] it will take a collective effort".

"We know that when policy and programs are delivered in partnership, when the community-controlled sector is strengthened…we will see real positive changes in the lives of first nations Australians," Senator McCarthy said.

"Healthy country means healthy people…it's about our identity. It's in our blood and it's who we are."

However Mr Mansell said the Commonwealth uses its "so-called" partnership with States, Territories and peak organisations "as an excuse for failure by the Commonwealth to act on its responsibility".

"The Prime Minister walked away from practical changes that could have been produced through a Commonwealth legislated treaty that would have returned land, empowered Aboriginal communities and vested responsibility for future planning with Aboriginal communities," he said.