It's perhaps the most poignant moment in Utopia. London-based Pilger returns to outback Australia for this documentary film to find little has changed since his 1985 work The Secret Country. The Utopia of the title refers to the Northern Territory region north of Alice Springs. There are the same shacks, the same lack of basic services and the same diseases. "I was shocked all over again," Pilger tells AAP.

"It's not that I expected a great deal of change. But to fly from a rich metropolis like Sydney, in what is now one of the richest countries on the planet, and drive into impoverished communities deprived of the basic services that the majority of Australians take for granted, is shocking." Pilger, 74, sees a treaty and genuine land rights as the key to improving the position of the original owners of Australia. Anything less, including the current talk of constitutional recognition, is simply a "distraction", he says. The film opened in the United Kingdom in mid-November and screens in Sydney on January 17. Subsequent limited dates include Melbourne, Brisbane, Perth and Alice Springs.

Pilger would have been delighted to show Utopia in Australia first but no local distributor offered a cinema run. "One Australian distributor refused to take the film because he said it was 'too dark' and 'it might upset people with its myth-busting'," the veteran journalist says. The film was commissioned by ITV in Britain and funded entirely in the UK. Pilger doesn't pull any punches in Utopia. He asks Warren Snowden, then indigenous health minister and a Labor MP in the Northern Territory for 23 years, "Why haven't you fixed it?"

Snowden, who has already admitted government policy has failed for at least 50 years, hits back stating: "What a stupid question. What a puerile question." But Pilger doesn't apologise for taking such an uncompromising view. "Unlike the US, Canada and New Zealand, no treaty was ever negotiated between the lawful owners of Australia and those who took their land," he says. "International law is clear - there has to be a treaty. "If the Australian political establishment believes it can continue to look the other way and deny the first Australians their basic rights they are seriously mistaken." Britain's left-leaning Guardian newspaper found that watching Utopia "was like being smacked about with a sledgehammer".

Pilger certainly can't be accused of being too nuanced. For example, he criticises tourists staying at the Alice Springs resort even though it provides some employment to indigenous people. Asked whether such ventures can't play a role in improving living conditions, Pilger shoots back: "Then why hasn't it?" There's not a lot that is genuinely new in this film but it provides a thorough overview, from the Gurindji strike through to the NT intervention and Kevin Rudd's apology which Pilger describes as "largely a media event". Pilger reminds the viewer that Bob Hawke in the 1980s walked away from genuine land rights in the face of a racist scare campaign from the mining industry. He draws parallels with Julia Gillard's decision to fold on Labor's mining tax in 2010. "The revenue lost is estimated at $60 billion," the director says in the film. "Enough to fund land rights and to end Aboriginal poverty."

Utopia also documents a new stolen generation with the ongoing removal of Aboriginal babies from their mothers. "This was one of the film's major investigations," Pilger tells AAP. "The theft is now higher than at any time in the last century." In mid-1997 there were 2785 Aboriginal children in out-of-home care across Australia. By mid-2012 there were 13,299 - almost a five-fold increase. The filmmaker notes the NT government spent $80 million in one year removing children but just $500,000 supporting impoverished families. Child abuse is one of the rationales for taking children away, yet the NT has one of the lowest rates of reported child abuse in Australia, Pilger says.

He argues Australians shouldn't still need educating about the plight of indigenous Australia, but if they do he hopes Utopia helps. "Utopia tells them the truth," he says. "If people choose to ignore the research and evidence in this film then their prejudice is unshakeable." Nannup is bewildered that tourists visiting Rottnest Island can stay in a former prison - the entire island was a Aboriginal penal colony for almost a century from 1838 - and know nothing of its black history. But a white tour guide at the Australian War Memorial provides a succinct analysis of what might really be going on.

"I don't know why we don't embrace that history," he says when Pilger asks why the frontier wars aren't commemorated in Canberra. "Maybe we're not overly proud of that history." Utopia is on limited released in Australia from January 17. Details at utopiajohnpilger.co.uk AAP