The latest report card on Aboriginal and Torres Strait Islander wellbeing has found improvements in early childhood enrolments and Year 12 attainment, but poor results in health and jobs.

Prime Minister Scott Morrison on Wednesday released the latest Closing the Gap report, declaring things are "better than they were ... but we have not made as much progress as we should have by now".

"There remains much more to do and we will do it differently by working together," he said.

"By going from good intentions and sky-high aspirations, to local, practical action that's driven by local leaders and local needs with clear accountability and responsibility and a clear line of sight to the community."

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Only two of the seven targets are rated as "on track".

The goal of 95 per cent of all Indigenous four-year-olds being enrolled in early childhood education by 2025 is close to being reached with an 86.4 per cent enrolment rate in 2018, compared with 91.3 per cent of non-Indigenous children.

As well, halving the gap in terms of Year 12 attainment is on track.

"The targets that was set for Indigenous Australians but not by Indigenous Australians do not celebrate the achievements & aspirations of Indigenous people... They don't tell you how realistic.. targets were in the first place" @ScottMorrisonMP delivers Closing the Gap report — Nakari Thorpe (@nakarithorpe) February 12, 2020

In 2018/19, 66 per cent of Indigenous Australians aged 20-24 years had attained Year 12 or equivalent.

Over the decade the proportion of Indigenous Australians aged 20-24 years attaining Year 12 or equivalent increased by 21 percentage points.

However, Indigenous health and employment continues to be a concern.

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In 2018, the Indigenous child mortality rate was 141 per 100,000 - twice the rate for non-Indigenous children (67 per 100,000).

Life expectancy is 71.6 years for Indigenous males (8.6 years less than non-Indigenous males) and 75.6 years for Indigenous females (7.8 years less than non-Indigenous females).

In 2018, the Indigenous employment rate was 49 per cent compared to 75 per cent for non-Indigenous Australians.

The annual report was initiated by former prime minister Kevin Rudd following the formal apology to the stolen generations.

Mr Morrison believes the reporting method has many shortcomings, masked "real progress" and failed to build lasting partnerships with Indigenous communities.

"The targets don't celebrate the strengths, achievements and aspirations of Indigenous people," he said.

Mr Morrison and state and territory leaders are expected to sign a formal agreement with Aboriginal and Torres Strait Islander peak organisations later this year to drive improvements at a local, regional and national level over the next decade.

However, it won't be ready for the next Council of Australian Governments meeting in March.

The agreement is expected to cover greater government cooperation and Indigenous community involvement in the areas of education, employment, business, community safety, suicide prevention and health.

AAP

Minister for Indigenous Australians Ken Wyatt welcomed the gains in early childhood and school education, but acknowledged progress has been slow in other areas.

"This demonstrates the need to adopt a new approach to Closing the Gap," he said.

"Key to this is shared accountability and shared responsibility - governments, Indigenous Australians and their communities and organisations."

Key findings from the 12th Closing the Gap report

Child Mortality

Target: Halve the gap in mortality rates for Indigenous children under five within a decade by 2018 - Not met.

In 2018, the Indigenous child mortality rate was 141 per 100,000 - twice the rate for non-Indigenous children (67 per 100,000). While the Indigenous child mortality rate has improved slightly, the rate for non-Indigenous children has improved at a faster rate.

Early Childhood Education

Target: 95 per cent of all Indigenous four-year-olds enrolled in early childhood education by 2025 - On track.

In 2018, 86.4 per cent of Indigenous four-year-olds were enrolled in early childhood education compared with 91.3 per cent of non-Indigenous children.

School Attendance

Target: Close the gap between Indigenous and non-Indigenous school attendance within five years by 2018 - Not met.

Most Indigenous students attended school for an average of just over four days a week in 2019. Gaps in attendance start from the first year of schooling and widen into high school.

Literacy and Numeracy

Target: Halve the gap for Indigenous children in reading, writing and numeracy within a decade by 2018 - Not met but some improvements.

In 2018, about one in four Indigenous students in Years 5, 7 and 9, and one in five in Year 3 remained below national minimum standards in reading. Year 3 literacy rates are improving.

Year 12 Attainment

Target: Halve the gap for Indigenous Australians aged 20-24 in Year 12 attainment or equivalent attainment rates by 2020 - On track.

In 2018/19, 66 per cent of Indigenous Australians aged 20-24 years had attained Year 12 or equivalent. Over the decade, the proportion of Indigenous Australians aged 20-24 years attaining Year 12 or equivalent increased by 21 percentage points.

Employment

Target: Halve the gap in employment outcomes between Indigenous and non-Indigenous Australians within a decade by 2018 - Not met (stable).

In 2018, the Indigenous employment rate was 49 per cent compared with 75 per cent for non-Indigenous Australians.

Life Expectancy

Target: Close the life expectancy gap within a generation by 2031 - Not on track.

Life expectancy is 71.6 years for Indigenous males (8.6 years less than non-Indigenous males) and 75.6 years for Indigenous females (7.8 years less than non-Indigenous females). While there have been improvements in Indigenous mortality rates from heart disease, stroke and hypertension, cancer rates are increasing.