The state has released its first annual Closing The Gap report as part of a national agreement on the initiative, outlining actions taken in the first year of its new partnership with the Coalition of Aboriginal Peak Organisations (NSW CAPO).

The national agreement on Closing The Gap was forged after a previous strategy expired "with most targets unmet" in 2018, the report notes.

Reducing incarceration rates for Indigenous adults by 15 per cent has gone backwards, with more incarcerated in 2021 than in 2019.

The government is consulting on potential changes to bail compliance and breaches and searching for further ways to include Aboriginal Elders and other respected community members in bail and sentencing decisions.

The rate of Indigenous children in detention has improved, however, falling below the 2031 target.

"Following the adult pattern, current increases are being felt most acutely at the front-end of the criminal justice system," the report notes, referring to people on remand awaiting sentencing, or a trial and yet to be convicted of a crime.

Suicide rates have worsened and are not on track to meet a target of 4.4 per 100,000 by 2031. The most recent data had rates increasing to more than four times the target.

A target for 55 per cent of Indigenous children being assessed as developmentally on track by 2031 has also gone backwards, with 38.8 per cent so in 2021, compared to 42.2 per cent in 2018.

CAPO co-chairs Charles Lynch and Robert Skeen said the inaugural report deepened a sense of accountability and provided transparent information on progress but more needed to be done.

They noted the first implementation plan "outlined what work was already underway and that was primarily being done by the NSW government".

"These actions were far from ambitious enough and did not reflect the kind of transformative changes called for under the national agreement," the pair wrote in their introduction to the report.

A draft of the next implementation plan, to run until 2024, includes "more new and enhanced initiatives that move us closer towards fulfilling the intent of the national agreement".

"This is just the beginning of real change and we look forward to the journey ahead working with community and government for the betterment of our people," they said.

Aboriginal Affairs Minister Ben Franklin said governments had spent too much time telling Indigenous people they know what's good for them without delivering lasting positive impacts.

The life expectancy gap between Indigenous people and the national average remains, for the most part, entrenched, he said.

But NSW is consulting with Aboriginal communities and investing in programs that reflect their local priorities.

"Accountability, responsibility and decision-making must be shared between government and Aboriginal people to develop and implement policies and programs that will achieve meaningful outcomes," Mr Franklin said.

Premier Dominic Perrottet said Closing The Gap was a priority.

"We know we are not closing the gap quickly and effectively enough. We need to do better and we can do better," he said.

A $716 million investment over four years in the current budget will help.

Australian Associated Press