Prime Minister Julia Gillard has formally expressed “personal disappointment” that part of Labor’s quest to close the gap on indigenous disadvantage appears to be failing.

Gillard delivered her annual “closing the gap” update to Parliament this morning, revealing a mixed bag of results which include a widening gap between the reading and maths skills of indigenous and non-indigenous school kids.

Five of the key eight indicators for reading and numeracy “will need considerable” work, said Gillard, as she presented the Closing the Gap Prime Minister’s Report 2013. Of particular concern are reading levels of year 3 indigenous students, which have actually decreased in 2012 after improving between 2008-2011.

It’s the government’s own hyped National Assessment Program Literacy and Numeracy results that reveal these troubling figures. After five years of NAPLAN testing, only four of the eight literacy and numeracy indicators (writing can’t be compared as the test has recently changed and data is unavailable) have shown an improvement.

Only one of these — year 3 reading — has proven statistically significant, yet ironically year 3 reading levels dropped 2% in 2012. Year 9 reading levels in 2012 again dropped below the 2008 benchmark (as they also did in 2009 and 2010).

Meanwhile, of the four indicators that have decreased, two of them — year 3 and year 7 numeracy — are statistically significant. The poorest NAPLAN results show that only 48.8% of year 9 indigenous students meet national minimum standards.

“I cannot conceal that these literacy and numeracy results are a source of personal disappointment. Last year’s optimism gives way this year to a starker realism,” said Gillard.

But the government can claim one win: it is on track to achieve its target that 95% of all indigenous four-year-olds in remote communities have access to early childhood education by 2013. It will be the first closing the gap target to be reached.

But it’s a complicated win: last year there was no data available to establish exactly how that target was going. This year data from the National Early Childhood Education and Care Collection shows that in August 2011, 91% of indigenous four-year-olds were enrolled in preschool programs. Latest data shows the government is on track to meet its 95% aim this year.

As the report notes, enrolment is not the same as attendance. One of the 2013 priorities for the Northern Territory’s Stronger Futures program is attendance.

Here’s how the six Closing the Gap targets — agreed to by federal, state and territory leaders in 2008 — are progressing …

Target: closing the life expectancy gap within a generation

Currently estimated at 11.5 years for indigenous males and 9.7 years for females, closing the life expectancy gap between indigenous and non indigenous Australians remains one of the hardest goals to achieve and report — they’re only updated every five years. Mortality rates, tracked on an annual basis, show a decline of 12% between 1998-2011, and 5% between 2006-2011 although non-indigenous mortality rates have also declined over the same period, meaning little progress on closing the gap. The report says this target won’t be met until 2031.

Target: halve the gap in mortality rates for indigenous children under five by 2018

During the period 1998-2011, mortality rates declined at a rate of 29%, outpacing the decline in non-indigenous mortality rates. This decline is “in the range” to meet the 2018 target, and Gillard said today the target is “within sight”.

Target: ensure access to early childhood education for all indigenous four-year-olds in remote communities by 2018

The report says this target will be met by 2013. The benchmark for the target is 95% enrolment for indigenous children in remote communities. The report from last year claimed data was not available to assess the progress of this target but new data shows the government is on track to achieve it.

Target: halve the gap in reading, writing and numeracy achievements for indigenous children by 2018

Using NAPLAN testing data, the report shows that progress on this target has been mixed. Only three out of eight literacy and numeracy outcomes for indigenous  students are on trajectory to meet the target. The data also shows that indigenous students in metropolitan areas achieve higher literacy and numeracy outcomes than their rural counterparts: only 20.3% of students in very remote areas achieved at or above national minimum standards compared to 76% in metro areas.

Target: halve the gap for indigenous students in year 12 (or equivalent) attainment rates by 2020

Progress on this target is ahead of schedule, according to today’s report. The year 12 or equivalent attainment gap between indigenous and non-indigenous Australians closed by 4.3% points, as attainment rates among indigenous students grew at a faster rate than non-indigenous students. To meet this target however, “continued rapid improvements will be needed” from 2011-16, says the report.

Target: halve the gap in employment outcomes between indigenous and other Australians by 2018

The 2011 census statistics showed that the gap in total employment outcomes widened since the 2006 census by 2.2 percentage points, characterised by a decrease in the proportion of indigenous Australians aged 16-64 in employment against a slight rise by non-indigenous Australians. The total employment rates for indigenous Australians decreased from 48% in 2006 to 46.2 % in 2011 compared to a 0.5% rise in the non-indigenous employment rate.