The way billions of taxpayer dollars is used for services in Queensland Aboriginal and Torres Strait Islander communities would be turned on its head under a plan that has been hailed as the most important policy document put forward in the state since the 1800s.

Under a draft plan put forward by Murri woman Professor Bronwyn Fredericks and her team at the Queensland Productivity Commission, future spending decisions would be made by communities themselves and held accountable to government.

It would be a change from the current system where governments make the decisions affecting communities.

A draft report said the changes would aim at unravelling a “bureaucratic maze” that had built up around a system that services about 40,000 people, or less than one percent of the Queensland population.

“The service delivery system is characterised by overlaps in roles and responsibilities, unclear lines of accountability and a difficulty to get things done, particularly when the challenges associated with delivering services into remote locations are added to the mix,” the report stated.

Cape York leaders Richie Ah Mat, chair of the Cape York Land Council, and Cape York Institute policy director Noel Pearson welcomed the plan.

“This is the most important policy document produced in the state of Queensland since the Protection Act was legislated in 1897,” Mr Pearson said.

The 1897 Aboriginals Protection and Restriction of the Sale of Opium Act created a position of ‘Queensland Protectors of Aboriginals’ to have control over almost all aspects of the lives of Aboriginal and Torres Strait Islander people in the state.

Commissioner Bronwyn Fredericks said some services were currently being delivered well, but many were not.

“Most service delivery issues are well-known to government providers and communities,” she said.

“What have been missing are the mechanisms for communities and government to achieve change.

“The proposed reforms aim to achieve two long sought-after goals — enabling communities to develop ways to improve outcomes for themselves and ensuring genuine accountability for outcomes.”

The QPC is accepting public submissions on the draft report until November 8. A final report will be presented to the Queensland Government in December.

The inquiry was launched at the request of Queensland Treasurer Curtis Pitt in December.

The draft report said for any single community, at least 13 Queensland government departments as well as the Australian government were involved in coordination, policy development and service delivery.

In Queensland, an estimated $7.6 billion of federal and state government money was directly spent on Indigenous services in the 2012-13 financial year – more than $38,000 per person.

The QPC estimated about $1.3 billion of Queensland government money was spent on remote communities that year — but the money wasn’t always being best utilised.

The draft report said the Queensland Government could improve the outcomes of services by enabling Aboriginal and Torres Strait Islander peoples to develop ways to improve outcomes for themselves.

“Rather than directing service delivery, the Queensland Government should manage accountability, oversight and risk through agreements with communities,” it said.

“These agreements should specify the objectives, principles and outcomes being sought, and should be negotiated between Indigenous communities and government.”

The report said economic indicators showed high rates of unemployment, welfare dependency and little private sector activity persisted in the Aboriginal communities compared to other Australian and Queensland communities.

It said it was a situation partly caused by past government policies.

In some cases infrastructure was funded and built in communities but was either unable to be used or unsuitable for use. Communities, service providers and governments all raised concerns about issues including mismatches between the services being provided and what communities needed, the report said.

Short-term funding of projects also inhibited long-term planning.

Wendy Caccetta