The New South Wales government has committed $246.8 million over the next four years as part of its Closing the Gap obligations through an additional $202.4 million allocated in the 2025–26 budget.

The announcement, which follows an audit last month that found governance arrangements for the National Agreement on Closing the Gap in NSW are not operating effectively, will see funding to support 14 Closing the Gap initiatives.

For the first time, the budget was developed in partnership with the NSW Coalition of Aboriginal Peak Organisations (NSW CAPO).

The NSW Aboriginal Land Council (NSWALC) welcomed the announcement, with Chairperson Raymond Kelly saying they remain "committed to walking alongside government to ensure that these commitments deliver lasting impact, with Aboriginal communities leading the way".

"Closing the Gap means more than words — it means recognising that when Aboriginal people are supported to work on Country in ways grounded in our cultural knowledge and identity, we're not only strengthening our communities, but we're also helping build a stronger, more sustainable New South Wales," Mr Kelly said.

"This week in Tamworth, I saw firsthand the power of these programs. 145 Aboriginal and Torres Strait Islander Rangers gathered for the inaugural Aboriginal Rangers Program Gathering, hosted by Tamworth Local Aboriginal Land Council. These programs are building futures—not just for our people, but for the entire state."

Aboriginal Affairs and Treaty Minister David Harris said the government is focused on "delivering real outcomes for Aboriginal people".

"Delivering on Closing the Gap and creating a more equitable state, where everyone has the opportunity to thrive, is not only the right thing to do; it builds a better NSW by strengthening our society, economy, culture and communities," Mr Harris said.

The NSW government said the new funding includes:

- $20 million for Aboriginal-led, culturally safe programs supporting adults and children leaving custody

- $13.4 million for the NSW Aboriginal Legal Service and Department of Communities and Justice

- $23.1 million for 25 Aboriginal Community Controlled Health Organisations to lead suicide prevention programs

- $23.8 million to revitalise Aboriginal languages

- $12.1 million for an Aboriginal Employment and Outcomes Program

- $21.9 million for the Aboriginal Families First 2000 Days program, which provides culturally appropriate, continuous care for Indigenous families from pregnancy through to school age

NSW CAPO will also receive $18.4 million over three years to support its capacity and involvement in the state's implementation of the Closing the Gap agreement.

On the $17.9 million in funding to support Local Aboriginal Land Councils (LALCs) to acquire, rezone, and activate land, Cr Kelly said: "Land is central to our identity, culture, and economic future.

"When we activate land, we create jobs, support local business, and build intergenerational opportunity," he said.

Last year's Productivity Commission findings pointed to a government reluctance to share power and the persistence of a "government knows best" mindset. The recent review of the Closing the Gap agreement emphasised the importance of governments working in genuine partnership with Aboriginal organisations.

However, the NSW government has faced criticism from some Indigenous organisations for introducing policies seen to contradict the National Agreement. These include new bail laws, which have significantly increased the number of Indigenous youths on remand, and court reforms that the Aboriginal Legal Service NSW/ACT (ALS) says will result in "delays, chaos and unjust outcomes for Aboriginal people".

"To date, the Aboriginal Legal Service has not received the necessary investment from the NSW government to accompany legal system changes that disproportionately harm Aboriginal people, despite the life-saving support we provide to thousands of Aboriginal women, children and men each year," ALS NSW/ACT Chief Executive Karly Warner said earlier this month.

National Indigenous Times has contacted ALS to determine whether the latest funding addresses some of these concerns.

An audit report by the NSW Auditor-General also noted that while the Premier's Department and NSW CAPO had agreed to jointly lead the National Agreement's implementation, "they have not formed a genuine partnership" and remain divided on how to align government policies with the agreement.

Staff from the Premier's Department stated that the governance framework for Closing the Gap was not meant to apply to every NSW Government policy affecting Aboriginal people, arguing that aligning with the agreement involves "considering" priority reforms during policy development.

NSW CAPO disagreed, maintaining that, despite differing views, all its member organisations agreed "alignment with the Priority Reforms was essential for all policies that are relevant to life outcomes for Aboriginal people".

Cr Kelly said on Friday, NSWALC will "continue to work with CAPO to hold all partners accountable".

"Through measurable outcomes, transparent reporting, and shared leadership, we can turn this funding into lasting change," he added.

Despite these tensions, the NSW Child, Family and Community Peak Aboriginal Corporation, AbSec, welcomed a separate $900 million five-year investment announced last month to support vulnerable families, improve child safety, and reform the child protection system. Nearly 40 per cent of that investment—about $350 million—will go to Aboriginal Community-Controlled Organisations.

"This approach is more than a policy shift—it is an act of justice. It restores our communities' right to care for our children and young people in ways that reflect who we are, where we come from, and what we need to thrive," AbSec Chief Executive John Leha said at the time.

In releasing the budget, the NSW government said that while more work remains, it is committed to "getting on with the job of improving the day-to-day lives of Aboriginal people and building a better NSW".

"The NSW Government is delivering on our commitment to the 2024 NSW Partnership Agreement by sharing decision-making and listening to Aboriginal people about their priorities and ambitions for how to Close the Gap," Mr Harris said.

"Genuine partnerships mean Aboriginal people have a lead role in designing and delivering the policies, programs, and services that impact their lives."