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The issue is simply that the identifiable category is in no way limited to indigenous people and nor are all indigenous people in that category.You have completely missed the point. Government has actually put in place policies for all people, and even attempts to do things differently to accommodate the varying needs of some. Despite these policies an identifiable category continues to suffer a higher rate of social disadvantage than all others, and across a broader spectrum of areas.
It's as simple as that.
If the aim is to help disadvantaged people then why not help disadvantaged people no matter who they are?
The argument that being ATSI is itself a disadvantage rests upon the notion of racial inferiority, that ATSI people really are on average inferior as such. Suffice to say it would be an extremely slippery slope to accept that as even slightly true without bulletproof evidence, based on robust science, that it is indeed the case. To the best of my knowledge no such evidence exists.
If a child is born and raised in Sydney to parents at least one of whom has a high status job, who are wealthy and who between them have strong business and political connections then is that child disadvantaged?
If a child is born and raised in a small town to parents who are unemployed with unstable family circumstances, drug use and a pessimistic outlook then can anyone seriously tell me that child is not disadvantaged?
Note that I didn't mention the race of the child and there's a reason for that. It's not the key problem. Sure, some races might be more prone to having those circumstances that's true but race is not of itself the issue.
Same with anything. Just because something's more or less common in a particular group doesn't justify ignoring those who have the problem and who aren't in the group.