Indigenous poverty is clearly entrenched and often different in nature to that experienced by other Australian poor. This paper examines recent evidence on Indigenous poverty and social exclusion and attempts to relate it to the Productivity Commissions Framework for Overcoming Indigenous Disadvantage. It discusses some models that involve the concept of ‘cumulative causation’ (i.e., where social processes go into an ongoing decline). One category of such models is the peer group theories which are examined in some details. Given that the OID framework seems to inform much of the current data collection, the report discussion reinterprets that framework in terms of the processes of cumulative causation. Empirical evidence is then provided to establish that cumulative causation is a plausible model by which policy decisions can be formulated and informed. The OID framework is also analysed, to confirm that it is an informative and useful basis for data collection on Indigenous disadvantage (i.e. judged in its own terms).