(Transcript from World News Australia Radio)
The report from Deloitte Access Economics and commissioned by Reconciliation Australia outlines the economic case for closing the gap.
It also identifies what the auditing firm considers to be the most efficient ways to achieve equality.
Thea Cowie reports.
(Click on audio tab above to hear full item)
By presenting the economic argument for closing the gap, Reconciliation Australia hopes to secure support from those who have not responded to the social argument for reducing disadvantage.
And with the Abbott government looking to get the nation's budget back into surplus, Reconciliation Australia co-chair Tom Calma says the economic case is strong.
"Hopefully the economic rationalists in bureaucracies will be able to see the benefits. This is going to be the real test isn't it, when you look at the commission of audit, when you look at the advice provided by the Aboriginal Advisory Committee, do they understand those economic arguments and the benefits of early investment for long-term benefits?"
The report paints a picture of a hypothetical Australia in the year 2031, where Indigenous Australians face the same health and labour market outcomes as other Australians.
The reports finds if the gap is closed, the nation's Gross Domestic Product would increase by $24 billion dollars in today's terms, or 1.15 per cent.
It also shows governments across Australia would enjoy an $11.9 billion boost to their budgets.
The author of the Deloitte Access Economics report is Ric Simes.
He says the economic modelling may secure broader support for closing the gap initiatives, particularly in the business community.
"For many years we've had a lot of conversations in this country about the social implications of improving the lot of Aboriginal and Torres Strait Australians. The starting point there has been a social one and given the focus of the government today and business today it's really important to say it's not just a social issue, it's an economic issue: bring a broader consensus behind the need and imperative of moving ahead here."
According to the modelling, closing the gap on employment outcomes would broaden the tax base, adding $7.2 billion to the nation's coffers.
It hypothesises that greater Indigenous wellbeing and affluence would save the nation $4.7 billion in spending in areas such as health and social security.
The report recommends avoiding a "one-size-fits-all" solution to unemployment across the nation, and instead working with businesses to develop local, industry-specific strategies.
Author Ric Simes:
"What they're trying to do is work with business to improve employment outcomes for Indigenous Australia and a lot of that will be done on the ground and where those businesses are, what industries they're in and what skills they require - that's going to be an important element in working out where to devote the effort."
The report also finds that Indigenous Australians are more likely than non-Indigenous Australians to be employed in public administration and safety, eduction and training, and healthcare and social assistance.
It suggests barriers to employment in these industries are not as challenging as in other sectors and therefore they should be targeted for further Indigenous employment growth.
But Professor of Economics at Charles Darwin University Bill Mitchell says there may never be enough jobs in remote parts of Australia.
He says the best way to deliver a sustainable solution in those areas is to acknowledge the traditional work Indigenous Australians do.
"Local communities in northern Australia are already 'working': in other words they pursue activities. Many of them are traditional activities related to water or to the land and the problem is that we don't see that as gainful work. My recommendations are always for the government to take a creative response in those areas and to initially - along with skill development and education of the young - to absorb those traditional activities into what we would define as work and remunerate them accordingly so that you can break the welfare dependence cycle."
The Deloitte report says although only one fifth of Indigenous Australians live in remote areas, closing the gap there would contribute to more than a quarter of national financial gains - or $6.5 billion by 2031.
