The review by the Close the Gap Campaign found that the strategy was "effectively abandoned" after five years.
It called for a reset and recommitted levels of investment in areas such as Indigenous health.
Liberal senator Linda Reynolds says Australia's history shows closing the gap is incredibly difficult, but she is confident progress is possible.
"This is an issue that has bedevilled many, many governments for decades," she said.
"This is an issue that everybody, on a bipartisan basis, has to work together. There are no easy solutions."
Labor frontbencher Penny Wong says the Closing the Gap Campaign's claim that the government had effectively abandoned the policy is "deeply concerning".
"Let's remember that one of the first things that the government did when coming to government was to cut funding for our First Peoples," she said.
"That is going to have an effect."
It is extremely disappointing to see a loss of bipartisanship on progressing reconciliation, she says.
Opposition colleague Doug Cameron says he spoke to Indigenous mayors from North Queensland on Wednesday.
"They are very concerned about the lack of support that this coalition is giving them in the context of housing," he said.
Senator Cameron says a Labor government will have a good look at the Uluru Statement of the Heart, which was largely rejected by the government last year.
"Given the history of colonisation in this country, the Indigenous groups are correct in saying this should be looked at," he said.
"They were encouraged to go and do it and when they've done it, this coalition has walked away."