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A report has found that focusing on the treatment and rehabilitation, rather than imprisonment, of Aboriginal people facing drug and alcohol-related charges would save state and territory governments up to $110,000 a year for every person.

The , released on February 3, concluded that there are “considerable benefits associated with the diversion of Indigenous offenders into community residential drug and alcohol rehabilitation services instead of incarceration. Diversion is associated with financial savings as well as improvements in health and mortality.”

Besides the financial savings there are also significant social justice reasons to keep Aboriginal people out of prison for minor offenses, as the 1991 Royal Commission into Aboriginal Deaths in Custody recommended.

Disturbingly, the Northern Territory now jails Aboriginal adults and children at rates higher than anywhere else in Australia, and these rates are rising.

Since the NT intervention — now called Stronger Futures — was introduced almost six years ago, alcohol-related police “incidents” have risen from . In June 2011, the overall imprisonment rates of Aboriginal people in the NT had risen by 40%.

But the Deloitte report has been dismissed by NT attorney general and corrections minister John Elferink, who it would not influence the Country Liberal (CLP) government’s policies.

“This Government is not going to make excuses for people who commit violent offences while they're drunk,” he said.

Earlier this year, in response to Warren Mundine’s call for a national summit to address soaring imprisonment rates, : “Well, no, it isn't the government's role to fix these problems, the role starts with the parents."

A glance at changes the CLP has made, or promises to make, since coming to power in August last year suggests that government policy can and will impact greatly on the number of Aboriginal people behind bars.

On February 6, during the annual Closing the Gap statement to parliament, Prime Minister Julia Gillard attacked the CLP government in the NT and the Liberal-National government in Queensland for “retrograde steps” being taken, which she said meant “rivers of grog” were once again wreaking havoc in Aboriginal communities.

She said: “We're hearing worrying reports about the rise in admissions in the emergency department at Alice Springs Hospital due to alcohol-related accidents and abuse."

She attributed this to the CLP’s scrapping of the controversial Banned Drinkers’ Registry last year. This registry, introduced by the previous Labor government, required showing photo ID when purchasing alcohol, so banned “problem drinkers” could be refused service.

But Gillard didn’t acknowledge that alcohol-related police incidents, domestic violence rates, suicide attempts and aggravated assaults have steadily risen over the entire period of the intervention and Stronger Futures.

Nor did she criticise the CLP for scrapping other programs, run by Aboriginal organisations, which were known to be effective in supporting Aboriginal people and minimising their contact with police.

Aboriginal organisation Larrakia Nation runs a widely respected Night Patrol program, which gives Aboriginal patrollers a central role in protecting their people from the harmful effects of drugs, alcohol and violence — and dramatically reduces their contact with the police.

Late last year, the NT government announced it would cut funding to the Night Patrol in June, as part of its cutbacks in funding for public and community services in an attempt to reign in the deficit.

Larrakia Nation and police representatives have both slammed the decision. Vince Kelly, president of the NT Police Association, said in December that the decision might mean “an increase of people in police custody who are intoxicated and drunk, or at the very lowest place in their health … We have seen exactly what tragic outcomes can happen when that occurs."

Larrakia Nation’s return-to-country program, which lends Aboriginal people money to return home to remote communities, will also be scrapped. About 4600 people benefit from this program.

Defending the decision to cease funding, in December Elferink described the program as a taxpayer-funded service for people to “get on the turps … If you come to Darwin we have an expectation you will behave in a certain way ... or you'll be charged with appropriate criminal offences or alternatively you'll be taken into custody”.

The Larrakia Nation’s CEO Ilana Elderidge responded to Elferink, telling ABC local radio on December 6: “For the Minister to suggest that everyone who comes to Darwin is only coming here to get drunk, I'm just appalled anyone could make such a disgusting suggestion … The impact will be people will still come to Darwin, because they have to [for medical care and other important services], and then they will be stranded here."

Hospital-based domestic violence services will also be cut, as will the SMART court and Alcohol and Other Drugs Tribunals — two initiatives meant to help keep people arrested for drug and alcohol-related crimes out of prison.

The North Australia Aboriginal Justice Agency (NAAJA) has slammed the cutting of SMART court and the night patrol as “short sighted” and having “serious long-term consequences”.

NAAJA principal legal officer Jonathon Hunyor said on December 4: “The cut to night patrol funding flies in the face of the recommendations on the Royal Commission into Aboriginal Deaths in Custody, which emphasised the need to minimise contact between Aboriginal people and police. This decision … is a recipe for disaster.”