Coalition unveils Indigenous policy plan

Opposition Leader Tony Abbott has flagged a more engaged relationship with indigenous Australians and believes constitutional recognition will unify Australia.

Mr Abbott has told the annual Garma cultural festival in Nhulunbuy in the Northern Territory today the problem between white Australia and Aboriginal Australia is not lack of good will, or lack of money, but lack of engagement.

He says a proposal for a referendum to recognise Aboriginal Australians in the constitution will be ready in the first 12 months of the coalition's first parliamentary term if elected.

Mr Abbott has recruited former Labor Party national president Warren Mundine to chair a Coalition government's Indigenous advisory council.

Prime Minister Kevin Rudd says he welcomes the proposal to appoint former Labor Party president Warren Mundine as chair of the Coalition's proposed Indigenous policy.

"I'm delighted and the reason is Warren's a good friend. I've known him for years. And Warren has got to that stage in his life where he is kind of over and above politics," Mr Rudd says.

"He will provide advice to anyone and everyone about what should now happen in Indigenous policy in Australia and as it should be. And I'm delighted if he's going to have an input to the other side of the politics. I don't think he's been shy in putting his views forward in the past to whomever."

If Tony Abbott becomes the Prime Minister he says he will meet with the council 3 times a year and he'll meet with warren Mundine once a month.

WATCH: Abbott unveils Indigenous Advisory Council plan

If the coalition wins the election on September 7 Nigel Scullion will be the minister for Aboriginal and Torres Strait Islander affairs

Jenny Macklin announced Labor's Indigneous Affairs policy yesterday.

They set new close the gap targets. They want to decrease the number of indigenous people in our jails.

Kevin Rudd says Indigneous Affairs should be a bipartisan issue.