An audit has found the governance arrangements for the National Agreement on Closing the Gap (the National Agreement) in NSW are not operating effectively.
Tabled on Thursday, the report by the NSW Auditor-General found whilst there are formal shared governance bodies, the governance structure doesn't "ensure accountability for the delivery" of the National Agreement's initiatives.
It argued despite the Premier's Department and NSW Coalition of Aboriginal Peak Organisations (CAPO) agreeing to work together to lead the implementation of the National Agreement, "they have not formed a genuine partnership" and do not agree on how to align existing Government policies with the National Agreement.
Staff from the Premier's Department said the governance structure and processes supporting the National Agreement were not intended to cover every NSW Government policy or program relating to Aboriginal people, arguing realigning with the National Agreement means "considering" priority reforms when designing policies.
This was refuted by New South Wales Coalition of Peak Organisations (NSW CAPO), who, despite varying views, all agreed "alignment with the Priority Reforms was essential for all policies that are relevant to life outcomes for Aboriginal people".
Signed by all States and Territories in 2020, the latest Closing the Gap Agreement was developed in genuine partnership with the Coalition of Peaks. The most recent NSW Closing the Gap report from 2022 found that only 7 of the 19 targets were on track.
Across the country the gap has been widening, with governments blamed for implementing policies that are seemingly at odds with meaningful reform. These include the expansion of bail laws in NSW, which have been slammed by Indigenous groups as increasing the rate of juvenile incarceration.
The report found some policy decisions relevant to Aboriginal people and communities have been made "in a way that is inconsistent with the National Agreement".
Citing the bail laws introduced last year - and extended for a further three years earlier this year - the report said NSW CAPO was not involved in the "development of options for reform," with the Premier's Department only telling them shortly before the announcement, a decision they acknowledged was "not made in genuine partnership" with the peak body.
Noting there have been changes to improve oversight of the implementation, the report nonetheless stated: "The changes do not provide clear accountability for the adoption and implementation of the National Agreement across the NSW Government."
Disagreements between the Premier's Department and NSW CAPO about their respective roles and responsibilities detracted from a "focus on the effective governance" of the National Agreement, the report added.
It did identify strengths, including the strong high-level commitment from both the NSW Government and Aboriginal Community Controlled Organisations (ACCOs) and the establishment of structural reforms to support shared decision-making and self-determination, but said overall, the governance arrangements were not working effectively.
The Premier's Department argued NSW CAPO had not "always fully engaged with the NSW Government as a genuine partner".
On the other hand, the report said NSW CAPO argued its primary role is to advocate for Aboriginal people, and the concept of partnership has been used by "some in the NSW Government" to "pressure them to align with pre-existing positions formed by NSW Government agencies, rather than advocating for the priorities expressed by Aboriginal communities".
"NSW CAPO argues that agreeing to this approach would diminish its role as an independent advocate for Aboriginal people," the report said.
"The disagreement on this fundamental aspect of the governance of the National Agreement significantly contributes to the parties' inability to establish effective governance arrangements."
The report recommended by June 2026 the Premier's Department should establish clear accountability for Government agencies for the design, implementation, monitoring and evaluation of the National Agreement in NSW, and, by December 2025, the Premier's Department and members of NSW CAPO should begin working in "genuine partnership in line with the principles in the National Agreement," and improve the accountability for planning and oversight of the implementation of the National Agreement in NSW.
This includes ensuring all actions in future NSW implementation plans "focus on, and clearly align with," the Priority Reforms.
The report also found the reporting on NSW CAPO members' use of funding for governance partnership work is not fully transparent, and they do not have documented processes to ensure probity.
It recommended by December, NSW CAPO develop and implement internal governance processes to manage probity issues and increase the transparency of decision-making and expenditure for work conducted under the National Agreement.
Noting the recommendations, both the NSW Government and NSW CAPO said in a joint response they remain firmly committed to closing the gap in NSW in partnership with the National Agreement.
In an ancillary response, NSW CAPO said, whilst taking issue with some of the framing of the report in regards to funding, the audit was a chance to "reset, refresh and reinvigorate" their partnership with the government.
It noted, however, despite walking on a journey "together" with the NSW government, it could never be one done as equals—in terms of resources, power and capacity.
"It is our capability to deliver for our communities that is the strength we bring to this partnership," they said.
