The peak body of Aboriginal-controlled health organisations has commended parts of the 2024 federal budget but also stresses that lasting structural reform is needed to help close the gap in health outcomes for First Nations people.

The National Aboriginal Community Controlled Health Organisation (NACCHO) said they welcomed some of the key aspects of the budget which impacted Indigenous people across the country. These include $94.9m to combat communicable diseases in First Nations communities, $12.8m in suicide prevention, $10m for mental health support, $11.1m to expand coverage of the Closing the Gap Pharmaceutical Benefits Scheme, and $12.5m to facilitate community-led distribution of menstrual products in regional and remote Indigenous communities.

NACCHO chair Donnella Mills said on Wednesday that the prelude to the budget had been dominated by "the mainstream and economic concerns", and said the organisation understood and supported the government's focus on cost-of-living pressure, housing, and domestic violence.

"But we also acknowledge that it contains some important measures that will assist Aboriginal and Torres Strait islander people and bring valuable relief to our sector," Ms Mills said.

She said the announced funding provided a "critical first step" after the defeated Voice referendum last year, and argued that "having been denied a voice," it was up to community organisations like NACCHO to advocate for the health sector on behalf of Indigenous communities.

"The government needs to get a positive dialogue happening in the wake of all the misinformation and hostility that we lived through," Ms Mills said.

"The best way of doing that is to invest in our communities and fund the responsibly costed package of proposals that NACCHO puts forward each year.

"The main message we have for governments, at the moment, is to work with us in closing the funding gap and let's continue to work together to get the National Agreement firing."

NACCHO said the latest productivity report showed governments were "fumbling" in their efforts to implement the National Agreement on Closing the Gap, arguing many did not understand the "necessary structural reforms" the state and federal leaders signed up for in 2020.

"We see the Agreement as an important mechanism to help close the gap," NACCHO said.

Speaking in Canberra on Wednesday, acting NACCHO chief executive Dawn Casey said the "myths" of the referendum last year couldn't hide the fact there remains a "health funding gap of $4.4 billion each year" for Aboriginal and Torres Strait Islander people — equating to almost $5,000 per Indigenous person.

"The Commonwealth's share of that gap is $2.6 billion," Dr Casey said.

"So, we have a simple challenge to work through with the Government: let's agree on a plan to close the funding gap, if we are ever to close the health gap?

"Why should Aboriginal and Torres Strait Islander people expect to live lives 8-9 years less than other Australians?"