Prominent business figures have been recruited to Tony Abbott's Indigenous Advisory Council as part of the Prime Minister's aim of creating a "new engagement" with Aboriginal people.

Westpac's chief executive Gail Kelly and Rio Tinto boss David Peever are among the 12-member group, dubbed "the Indigenous dozen", who will address a lack of opportunity in Indigenous communities.

The head of the council, Warren Mundine, a former president of the ALP, says the inclusion of senior business people will help drive economic development.

Mr Mundine says getting corporate Australia on board is critical to solving Indigenous disadvantage.

"Commercial activity needs to happen on Aboriginal land and in Aboriginal communities," he said.

"[The committee] is quite clear about our intentions."

Closing the disadvantage gap for Aboriginal communities is a key aim for the council.

"The Council brings a diversity of views and experience to the task of ensuring our programmes achieve real, positive change in the lives of Aboriginal people – changes that can increase participation, preserve Aboriginal culture and build reconciliation," the Prime Minister said in a statement.

"To do this we must ensure that children go to school, adults go to work and that the ordinary law of the land operates in Aboriginal and Torres Strait Islander communities."

Other members of the panel include successful Indigenous businessman Daniel Tucker, the managing director of Carey Mining - an entirely Indigenous-owned mining and civil contractor.

Ngaire Brown, one the first group of Aboriginal medical students in Australia, is also included.

Andrew Penfold, the chief executive of the Australian Indigenous Education Council, and Peter Shergold, chancellor of the University of Western Sydney are also among the 12.

The council will meet three times a year with the Prime Minister and other senior ministers to inform the policy implementation of the Government.