Association president Shane Gill said Aboriginal legal services receive inadequate funding, and need to be better resourced if they are to properly represent indigenous clients in court.

Mr Gill said the "appalling rate" of indigenous incarceration in Australia needed urgent attention by ACT and federal governments.

He said the Bar Association believed the incarceration rate for indigenous Australians in the ACT was roughly triple that of non-indigenous, based on data from the Productivity Commission's Report on Government Services and from the Australian Bureau of Statistics.

"That triple has been in existence since before the Alexander Maconochie Centre, and it's still in existence, and that's despite the exponential growth of the prison population," he said.

"It's a red flag for us, because at the moment no one's been able to put their finger on why it's occurring, but it shows there's a systemic problem."

Mr Gill credited Attorney-General Simon Corbell for rejecting the use of mandatory sentencing in the ACT, which the Law Council of Australia described as having an "unacceptable impact" on indigenous imprisonment.

But he said increased funding for Aboriginal legal services – the main ACT body being the Aboriginal Legal Service ACT – was key in reversing the trend.

He said such services had been the subject of nationwide generalised de-funding.

That meant those organisations were constantly stretched, and said the sector overall was collapsing.

"You're asking less resources to cover what they struggled to cover in the first place," he said.

Mr Corbell said he was aware of the concerns of the legal profession and broader community, and said the government was pursuing practical and sustainable strategies to reduce the high rates.

He said the government was currently developing the second Aboriginal Justice Agreement, consulting extensively with the ATSI Elected Body and community members to find priorities.

The partnership agreement, in its final stages, would aim to reduce indigenous incarceration by reducing recidivism, boosting access to diversionary programs, improving access to justice services, and improving data collection and reporting.

Mr Corbell also flagged a new model to help negotiations between indigenous Australians in the ACT and police, corrections, and other service providers.

The current review of sentencing laws will also focus on over-representation of indigenous Australians in the justice system, he said.

The Bar Association's funding calls come on the back of a Productivity Commission report Overcoming Indigenous Disadvantage, released last month.

That report found the rate of indigenous imprisonment was growing at an alarming rate.

Nationally, young indigenous Australians are locked up at a rate 24 times higher than non-indigenous.

The adult indigenous imprisonment rate has jumped by by 57 per cent between 2000 and 2013.

The rate of incarceration for indigenous women has increased by 74 per cent over the same period.