O, what may man within him
hide,
Though angel on the outward
side!
Measure for Measure, Act three,
Scene two
The ANAO have recently issued a new performance audit
titled Closing the Gap in Schooling and Early Childhood Development —
Partnership and Reporting (link
here).
The focus of the audit is the implementation of the
National Agreement on Closing the Gap as it relates to 3 targets related to addressing
inequality in outcomes related to schooling and early childhood development: targets
3, 4 and 5 of Closing the Gap.
According to the Productivity Commission Closing the Gap
dashboard (link
here),
at present, Target 3 on Early Childhood Education is improving and on
track with 94.2 % of children enrolled in pre-school in 2024 (but see the discussion
of data issues below). Target 4 on Children Thriving is worsening and
not on track, with only 33.9 % of Indigenous children commencing school being developmentally
on track. Target 5 on Student Learning Potential has improved but is not
on track with 68.1% of Indigenous people aged 20-24 having attained Year 12 or
equivalent in 2021.
While comprising less than 120 pages including appendices, the
ANAO Performance Audit is a dense and complicated read, not assisted by its
focus on intricate program detail and the complexity of the processes across
multiple portfolios, jurisdictions and programs that impact upon these targets.
In para 1, the report states [footnotes removed]:
The objective of the National
Agreement is to ‘overcome the entrenched inequality faced by too many
Aboriginal and Torres Strait Islander people so that their life outcomes are
equal to all Australians’. The Australian Government is jointly accountable with
the state and territory governments for the implementation of the National
Agreement.
In para 9, the ANAO lay out the objectives of the audit as
follows:
… to assess the effectiveness
of partnership arrangements, funding design activities and measurement of
progress for schooling and early childhood development commitments under the
National Agreement on Closing the Gap.
In this post, I do not propose to attempt to summarise the
audit in any comprehensive way but instead will focus on those findings which
seem to me to reveal something deeper about the National Agreement, its
implementation, and the performance of the agencies involved. I recommend
readers at least have a look at the introductory Summary and Recommendations
section to obtain a sense of the overall shape and contents of the Performance Audit.
Paragraphs 11 to 14 of the Summary and Recommendations
section outline the conclusions of the audit. Bolding of text has been added
to emphasise key points.
In paras. 13 and 14, the ANAO note that:
More can be done to align
mainstream federal funding agreements to the priority reforms. There is a
lack of transparency over how federal funding agreements support Aboriginal
community-controlled organisations…
The Australian Government’s
progress reporting for Targets 3, 4 and 5 could be more reliable and complete.
Dashboard information published by the Productivity Commission on Targets 3, 4
and 5 is accurate, however Target 3 results (the only one of these three
targets considered to be ‘on track’) are not fully meaningful due to a
measurement issue. Many ‘supporting indicators’ set out in the 2020 National
Agreement on Closing the Gap, which are intended to lead to greater
understanding and insight into how governments are tracking against the
targets, were not developed as at June 2025. The Australian Government’s
annual reports on Closing the Gap are accurate but increasingly incomplete and
unmeaningful. The NIAA has not done enough to appropriately advise the
government about annual reporting requirements established in the National
Agreement.
In para. 17, referring to placed based agreements the ANAO
state:
In 2021 it was agreed that
state and territory governments would resource the establishment and governance
costs for any place-based partnerships in their jurisdiction. Place‑based
partnerships were not fully established by 2024 as specified in the National
Agreement on Closing the Gap. …. The NIAA coordinated Australian Government
participation in governance arrangements but did not coordinate with the
relevant state governments to facilitate establishment of the two
place-based partnerships. Australian Government reporting on place-based
partnerships, including for place‑based partnerships relevant to schooling and
early childhood development, is deficient and worsening.
In para. 19, the ANAO note:
… The Australian Government
has not met the requirement in the National Agreement on Closing the Gap to
report annually on the allocation of grant funding to Aboriginal and Torres
Strait Islander organisations (including ACCOs).
In para. 22, the ANAO note:
The coordination and
publication of the Australian Government’s annual reports on the Closing
the Gap National Agreement have been facilitated by the NIAA. While accurately
drawing on the PC dashboards, information on Targets 3, 4 and 5 has become
less complete over time, reducing transparency over Closing the Gap progress in
schooling and early childhood development.
ANAO Recommendations
The ANAO made only four formal recommendations (pages 11
and 12), each of them quite anodyne. The response to the single recommendation
to the Education Department was ‘agreed’. The three recommendations to NIAA
recommend actions simply amount to requests for mere compliance with the terms of
the National Agreement. In each case, the NIAA response might best be described
as prevarication.
Recommendation One
focusses on reporting on the implementation of place-based partnerships;
see paragraph 2.25 to 2.36. In para 2.34, the ANAO note that the last three
annual reports on closing the gap compiled by NIAA have not complied with the
requirements of clause 37 of the Agreement. The NIAA response was not to agree,
nor to disagree, but to ‘note’ the recommendation, adding a comment that the
content of the annual reports is a matter for Government.
Recommendation Two,
which arose from the analysis in Chapter 3 of the Audit on funding design
focusses on the extent to which the annual reports list the number of
Community controlled organisations receiving funding, a requirement of
clause 118 of the National Agreement. The NIAA response was identical to that
provided in relation to Recommendation One. In this case, the ANAO had noted
(para. 3.46) that NIAA had not briefed the Minister on the requirement to
include this information prior to her approval of the Annual Report.
Recommendation Three was
directed to the Department of Education and dealt with improved monitoring
of the same issues. The Department’s response was to agree with the
recommendation and (in effect) promise to do better.
Recommendation Four (para
4.36) dealt with reporting on progress on closing the gap. The ANAO had
examined this issue in detail in Chapter Four of the audit and raised a series
of detailed issues which I won’t seek to summarise. I will note one instance
(para. 4.13) where the formula used to measure Target Three used different data
sources for the numerator and denominator, and this led to inaccuracies and
overestimates in the progress being achieved. In 2021, the Productivity
Commmission commissioned a review from the ANU to identify improved ways of
dealing with the data measurement problems. The ANU report recommended in
November 2024 the use of an alternative data source ‘to avoid the biased and at
times mathematically impossible observations that result from the
numerator-denominator mismatch’. The ANAO report that as of June 2024, the
Joint Council’s Partnership Working Group had not considered the recommendation
and further reported that the Productivity Commission had advised (footnote
124) that a further study would be required. In this policy domain, everyone
hastens slowly.
In relation to the meaningfulness of annual reporting on
closing the gap, in para. 4.27, the ANAO state:
When preparing the Australian
Government 2022 Annual Report, a brief to the NIAA Chief Executive Officer from
the Closing the Gap Branch stated that, in order to meet commitments under the
National Agreement on Closing the Gap, the annual report would ‘at a minimum’
need to comply with Clause 118 of the agreement (see paragraph 4.23).
Yet, as noted in para 4.29:
since the 2022 Annual Report,
for Targets 3,4 and 5, the completeness of target information included in the
annual report has declined (Table 4.4), reducing transparency over outcome
progress for schooling and early childhood development commitments.
In concluding their audit, the ANAO cited (para 4.34) the
Productivity Commission (PC) 2024 Review:
In 2024 the PC’s three-yearly
Review of the National Agreement on Closing the Gap found that implementation
plans and annual reports were not fulfilling the intended purpose. The review
found that the two documents did not reconcile (annual reports contained a
limited set of the actions that governments had committed to and reported on
actions not listed in the Closing the Gap implementation plan). The review
found that reporting on progress was high level or incomplete, and delivery
risk and issues were not included. The PC concluded:
By and large, the annual
reports focus on listing activities that have been undertaken, while giving
significantly less attention to describing what has not been delivered as
planned and areas where there has been little progress.
Recommendation Four and
the NIAA response are the concluding two paragraphs of the ANAO Audit
report:
4.36 The Australian Government
improve the completeness and meaningfulness of the Australian Government’s
Closing the Gap annual reports and comply with clause 118 of the National
Agreement on Closing the Gap by: drawing from the Productivity Commission dashboard
to include information about target results and status; and including risks,
successes, failures and lessons learned.
National Indigenous
Australians Agency response: Noted
4.37 Any amendments to the
Commonwealth Closing the Gap Annual Report is a matter for consideration by
Government. The NIAA will brief the Government on the ANAO findings and
recommendations.
Commentary
The following comments in response to this audit are high
level and are best characterised as comprising a set of assertions and
questions based on my own experience rather than detailed analyses.
The ANAO are to be commended for their detailed analysis of
what is a complex and dynamic policy domain, however, I was left with a
deep-seated sense that they are much too cautious. Their analysis itself
focusses on compliance with process, taking the National Agreement as the
benchmark, and assessing all that is going on (or not going on) against that
benchmark. But the benchmark itself (that is the institutional architecture of Closing
the Gap) is deeply flawed and as I have argued elsewhere (link
here
and link
here),
seems likely to have been deliberately designed to be partial in its focus, and
to be so complex and complicated that no interested observer (not even the
ANAO) can effectively monitor its implementation. The result is that there is
no way for anyone, from the Joint Council down to scribblers based in
universities, to keep governments accountable. In these circumstances, the
ANAO’s efforts in devoting around a year’s work to assessing compliance against
a flawed benchmark is in effect a wasted opportunity. In addition, the audit
reflects a wider flaw in ANAO reports, namely that the formal recommendations
do not adequately reflect the shortcomings identified in the analysis. This
appears to be a deliberate policy aimed at not upsetting the Executive arm of
government (which effectively controls the Joint Committee of Public Accounts
and Audit to which the ANAO reports), while maintaining a technical commitment
to independence and evidence-based analysis. For an example of the operation of
this dynamic hidden in plain sight, refer to Appendix Two of the ANAO Performance
Audit.
A close reading of the Audit makes extremely clear that
NIAA are failing comprehensively in both ensuring the National Agreement is
implemented, and in undertaking the policy work (that used to be core business
for the APS) that would allow and ensure that the policy was being updated and
made increasingly effective. It is as if the NIAA considers that suggesting
improvement to the National Agreement is someone else’s job. And as for the
NIAA responses to the three recommendations, they amount to telling the ANAO
and the wider public to ‘go jump’; in effect, they are saying it’s not their
problem.
As the NIAA CEO states in her response letter in Appendix
1, the NIAA ‘will continue to work with Government to support implementation
of the National Agreement on Closing the Gap within its remit.’
[emphasis added]. How this supporting role and implicitly constrained
remit aligns with the functions contained in the Executive Order
establishing NIAA (link
here)
is difficult to reconcile. Those functions are unequivocal and provide NIAA
with an expansive remit involving leadership and coordination across the
breadth of the public sector:
- To lead and coordinate Commonwealth
policy development, program design and implementation and service delivery
for Aboriginal and Torres Strait Islander peoples
- To
provide advice to the Prime Minister and the Minister for Indigenous
Australians on whole-of-government priorities for Aboriginal and Torres
Strait Islander peoples
- To
lead and coordinate the development and implementation of Australia’s
Closing the Gap targets in partnership with
Indigenous Australians
The ANAO performance audit is the result of perhaps a year’s
work by a team of around eight analysts, yet there is no discussion about
· whether
the schooling and education elements of closing the gap are in fact working
well or not, and if not why not;
· the implications
of rapid demographic change in the Indigenous population;
· why
there is no target directed to improving school attendance;
· whether
there are regional differences in outcomes, and if so what to do about them;
· whether
the 44 separate programs (listed in Appendix 7) directed at the three targets
in focus are designed to be effective (rather than just whether they involve
partnerships or community-controlled organisations);
· and
importantly, whether the $1.48bn allocated nationally to addressing the targets
(see Appendix 7) is too little, or perhaps too much, spent well or poorly, or whether
it is poorly directed.
Of course, the response to this critique will be that I am
asking for an evaluation not a performance audit. Or to put it another way, I
am focussing on effectiveness, whereas the ANAO and the relevant agencies are
focussed on efficiency. If so, I plead guilty. The 2024 PC review of Closing the
Gap did not address most of these issues and arguably failed to adequately
address the structural conflict of interest involved in its management of the dashboard
and reporting framework for Closing the Gap. There is a desperate need for an
independent and comprehensive macro-evaluation of the entire Closing the Gap
framework.
Agencies control what is to be evaluated and when, and
often decide to delay or cancel publication (link
here).
The bottom line is that across the public sector the resources directed to systematic
and comprehensive evaluation of Government programs is minimal and
decentralised notwithstanding the comparatively recent establishment of the
Australian Centre for Evaluation (link
here).
Invariably, agency initiated evaluations focus on micro programs rather than
larger programs, thus avoiding the possibility that an evaluation will reach
politically embarrassing conclusions. Governments prefer not to be held to
account for lack of effectiveness and find it much easier to manage issues that
can be characterised as related to efficiency or process. A focus on
effectiveness involves asking whether adequate resources are being allocated,
whereas a focus on efficiency sets the issue of adequate funding aside. The
absence of adequate investment in effectiveness evaluation is a root cause of
structural and systemic policy failure, especially where the interests
advocating for greater access to government resources are comparatively weak.
Conclusion
The bottom line here is that the ANAO has done an excellent
job in identifying and laying out the myriad ways in which implementation actions
directed towards just three of the 19 Closing the Gap targets are not meeting
the benchmarks established in the National Agreement. One can only wonder what
the comparative results would be for the 16 targets not examined. Yet the more
fundamental questions of effectiveness that permeate the policy architecture
established to implement and monitor ongoing policy and program action to close
the gap have not been addressed.
The Commonwealth Government has not provided a response to
the Productivity Commission Review of Closing the Gap completed in 2024, and no
Commonwealth Government has formally responded to the 2017 Productivity
Commission Review into an Indigenous Evaluation Strategy (link
here).
What we observe here is the contemporary and ongoing maintenance of Stanner’s
Great Australian Silence (link
here). In these circumstances, the ANAO by deciding to initiate a Performance
Audit focussed on process has in effect provided yet more political and policy
cover for ongoing Government inaction in relation to addressing the endemic and
systemic effectiveness issues that prevent the Closing the Gap policy from
succeeding.
The continuing policy failure on Closing the Gap, and the
deliberate refusal to avoid addressing issues related to the effectiveness of
current policy approaches is a tragedy for Indigenous interests (particularly
those Indigenous citizens suffering deep social and economic disadvantage), but
also a tragedy for the nation. It represents a major failure of our political
democracy.
23 January 2026
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