Feds to NT Government: Use money to Close the Gap or it'll go to organisations who can

Dechlan Brennan
Dechlan Brennan Published September 18, 2026 at 4.10pm (AWST)

Directly increasing funding to organisations delivering Closing the Gap outcomes, rather than the Northern Territory Government, is a possibility, the federal government says, as the NT continues to lag in closing the gap outcomes.

The comments on Friday come as experts, advocates and Indigenous groups have been outspoken in their calls for the federal government to hold the Country Liberal Party (CLP) Government to account financially for what they argue is a consistent disregard of the Closing the Gap agreement.

Speaking at a press conference in Darwin on Friday, federal Minister for Indigenous Australians Malarndirri McCarthy and Finance Minister Katy Gallagher said organisations on the ground in the NT "don't feel like they're actually being included in the conversation".

"If you have expertise in a particular area, whether it's education, whether it's out in the communities with housing, whether it's the care of children, the organisations that are reaching out are saying that they have not got the involvement," Senator McCarthy said.

The Northern Territory is the worst-performing jurisdiction in the country under the agreement, with policies around justice and child protection under the CLP viewed as only widening the discrepancies.

It is 80 per cent funded by the Commonwealth and receives 4.8 times its population share in GST, with the latter due in part to the high levels of social disadvantage the Territory faces.

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Despite Priority Reform One of the Closing the Gap agreement calling for shared decision-making and formal partnerships between Aboriginal people and governments, numerous organisations and individuals have told this masthead they feel Aboriginal Territorians have been shut out of conversations, or their views disregarded.

Opposition leader Selena Uibo this week told National Indigenous Times the divide between the CLP and Aboriginal communities would only grow if decisions continued to be made "without genuinely listening to Aboriginal Territorians".

"It also takes the Northern Territory further away from shared decision-making and self-determination," she said.

"If this continues, frustration in communities will grow, pressure on services will increase and the relationship between government and Aboriginal Territorians will become harder and harder to repair."

In July, two leading Aboriginal figures — Rob McPhee, the independent Aboriginal chair of the NT's Children and Families Tripartite Forum, and Children's Commissioner Shahleena Musk — separately stood down from their roles, arguing there was no longer transparent and good faith dialogue from the CLP Government.

Both were heavily criticised by the CLP Government after their resignations.

Last month, Yiŋiya Mark Guyula, a Yolŋu man of the Djambarrpuyŋu clan, quit as an independent member of the NT Parliament, arguing he could no longer "sit opposite a government who are not willing to listen or form partnerships".

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On Friday, Senator Gallagher said delays or reductions in the NT Government's own expenditure were concerning for the Commonwealth.

These included reports that the NT Government is looking to renege on aspects of the $4 billion, 10-year joint housing initiative, and that it has taken 10 months to submit some paperwork for Commonwealth disaster relief funds.

"We want to make sure that if there are problems at our end, we're dealing with them, but also to let the Northern Territory know that we are going to pursue this," Senator Gallagher told reporters.

"We're going to continue to pursue it. We will continue to write to them. We will continue to come up here and try and make sure that that money is flowing to where it's needed, and that communication between the two governments is what's needed."

Asked what levers could be pulled, Senator Gallagher, who, along with Senator McCarthy, was meant to meet with Chief Minister Lia Finocchiaro on Friday before she became "unavailable" — instead met with the acting Chief Minister — said that if progress isn't going to be made with the NT Government, the Commonwealth "will look to increase the amount of direct funding relationships we have with other organisations".

"We do that in health already," she said. "But in the future, if we are going to be frustrated or not see the money getting to where it's needed, that we would look to direct funds [to] those organisations.

"Now, the Northern Territory Government put to us...that that's not ideal from their point of view because they question whether those organisations are delivering what they want."

Senator McCarthy said the Commonwealth wanted the NT Government to know it has issues with the "delivery of funding responsibilities" across numerous federal portfolios, but noted that "funding restriction isn't really what we're looking at here".

Independent MLA Justine Davis told National Indigenous Times this week that the NT Government needed to be "held accountable for the money that it's been given" — especially around the funds tied to Closing the Gap outcomes and social disadvantage.

If the outcomes are going backwards, she said, the Commonwealth should say "give us the money back, and we'll give it to someone who can who can actually do something with it".

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