The tenth annual "Closing the Gap" report said Australia was failing to meet its targets in four-out-of-seven measures, including reading and writing among indigenous students, a key driver behind its failure to boost employment.
Prime Minister Malcolm Turnbull said the latest report showed improvement, but not in some areas - such as bridging a gap in life expectancy.
Efforts were showing results in areas such as reducing Aboriginal child mortality and improving rates of high school qualifications.
"The last decade has given us a richer understanding about what works and what does not", Mr Turnbull told parliament on Monday.
The government was on track to meet three of its seven targets - halving the gap in child mortality by 2018, halving the difference in students completing high school by 2020 and enrolling 95 percent of indigenous 4-year-olds in education programs by 2015.
Indigenous Labor senator Pat Dodson welcomed news three of the seven targets are on track.
"The most valuable lesson has come from applying advice to do with, not to (indigenous people)".
Kevin Rudd committed Australia to reducing the difference in life expectancies between Aboriginal and non-indigenous people on February 13, 2008, when he made a historic apology to Australia's indigenous minority for past injustices.
In the eight years from 2008 to 2016, 101 billion USA dollars was spent by the government in an attempt to achieve the seven key targets to little avail.More news: Uber's net loss widens to $4.5B for tumultuous 2017
More news: Lamoureux-Davidson sets Olympic record as US defeats OAR, 5-0
More news: Penn State fills 2020 schedule
"What I like about the refresh is it gives us a chance to look at the targets, are they the right targets or do we define them, like child mortality, in a slightly different way", Wyatt said.
Mr Turnbull says he is increasingly convinced closing the gap is an impossible goal without equal participation in the economy.
"Too much is written about communities, not almost enough is written for communities. This is a big shift".
Meantime, the Federal Opposition Leader has pledged to legislate for an Indigenous voice to Parliament, if Labor wins the next election.
"It was not just an expression of sorrow or regret but a declaration of intent, a promise for action", he will say in parliament.
Survivors would be offered payments of $75,000 to resolve "unfinished business", including $7,000 for a one-off payment for funeral costs.
Under the scheme, those survivors would be able to access compensation within 100 days of Shorten taking office as the prime minister.
A decade ago, Australia embarked on an ambitious roadmap to uplift its indigenous people, who have trailed the rest of the population in nearly every social and economic indicator.