This paper, which was presented as the closing keynote address to the Australian Institute of Health and Welfare Conference held in 2007, reflects on the conference theme of ‘diversity and disadvantage’. The author discusses how policy advisors might conceptualise disadvantage and the means of addressing it. In particular, he looks at the situation of Indigenous people because this is the group of Australians who have experienced the highest levels of disadvantage over the longest period of time. The paper begins by considering how disadvantage and poverty are measured and defined, and argues that measuring policy effort against the benchmarks, Indigenous Australians are entitled to feel especially disadvantaged. The author then states that those engaged in Indigenous policy development must consider the development of human capital, and high levels of education and physical and mental health are the hallmarks of strong human capital. Research has shown that education can help transform social and economic opportunities, with particularly strong gains for those from disadvantaged backgrounds. Indigenous education can be seen as an important means of securing individual and community development, and provides a clear focus for multiple interventions. He outlines seven steps that, if followed, would go a long way to addressing the chronic social problems that many Indigenous communities experience. These include: i) there must be basic protective security from violence for Indigenous parents and children; ii) early childhood development interventions, coupled with parent support to develop appropriate at-home learning environments, provide a critical foundational base for young children; iii) the home environment needs to be conducive to regular patterns of sleep and study, free from overcrowding and distraction; iv) there needs to be ready access to suitable primary health service infrastructure; v) particularly in an environment where real jobs are not currently the norm, incentives in the welfare system cannot be allowed to work against the promotion of investment in human capital, especially of children through the provision of safe and healthy living environments and their attendance at school; vi) there must be a realistic prospect of an educated Indigenous person securing a real job, with the support of appropriate employment services; and vii) governance systems have to support the ‘political freedom’ and ‘social opportunities’ of local Indigenous people (both men and women) to be engaged in policy development.