The Young Offenders Act 1997 (YOA) created a hierarchy of sanctions designed to divert young offenders from the court system including warnings, police cautions and youth justice conferences. The aim of this study was to determine whether the introduction of the YOA had any impact on (a) the probability that a young offender will receive a custodial order 1; and (b) the time taken to receive a first custodial order. These two custodial outcomes were compared for Indigenous and non-Indigenous young people. The rates of a custodial order prior to and following the introduction of the Young Offenders Act were compared. The times taken to receive the first custodial order prior to, and following the introduction of the Young Offenders Act were compared using the asymptotic failure rate of ever receiving a custodial order. The results show that while Indigenous young people are more likely to receive a custodial order as a juvenile (hazard ratio of 1.4) compared to non-Indigenous young people, the risk of receiving a custodial order fell for both groups after the introduction of the YOA (hazard ratio of 0.63). The results show that, after the introduction of the YOA, the risks of receiving a custodial order for both Indigenous and non-Indigenous young people dropped by 17.5 per cent and 16.3 per cent respectively. For Indigenous young people, 10 per cent of the pre-YOA cohort received a custodial order within 17 months of first proven court appearance, whereas after the YOA commenced this took 21 months. For the non-Indigenous young people, 10 per cent of the pre-YOA cohort received a custodial order within 36 months whereas after the YOA commenced this took 57 months. The results suggest the YOA has been effective in diverting young people from custody (including Indigenous young people).