Flags at Narrabundah Primary School, ACT
This question, and the way it is sometimes used, is a common source of difficulty. For people choosing to identify, it is a personal and sometimes challenging issue. It has nothing to do with skin colour.
The Australian Bureau of Statistics defines an Indigenous person as a person of Aboriginal or Torres Strait Islander descent who identifies as an Aboriginal or Torres Strait Islander and is accepted as such by the community in which he or she lives. There are three components to the definition: descent; self-identification; and community acceptance.
Eligibility for certain Australian Government education programs are based on this definition. For example, for ABSTUDY purposes, an Aboriginal or Torres Strait Islander is someone who is of Aboriginal or Torres Strait Islander descent, who identifies as an Aboriginal or Torres Strait Islander, and is accepted as such by the community in which they live, or have lived.
And here are some words from Indigenous people themselves.
We are the Indigenous peoples of Australia — Aboriginal and Torres Strait Islander people.
Aboriginal people are those whose traditional cultures and lands lie on the mainland and most of the islands, including Tasmania, Fraser Island, Palm Island, Mornington Island, Groote Eylandt, Bathurst and Melville Islands.
The Torres Strait Islands lie between the northern tip of Cape York in Queensland and the south-west coast of Papua New Guinea. The Torres Strait Islanders have many cultural similarities with the peoples of Papua New Guinea and the Pacific. ...
The term 'Aboriginal' has become one of the most disputed in the Australian language.
The Commonwealth definition is social more than racial, in keeping with the change in Australian attitudes away from racialist thinking about other peoples. An Aboriginal person is defined as a person who is a descendent of an Indigenous inhabitant of Australia, identifies as an Aboriginal, and is recognised as Aboriginal by members of the community in which he or she lives. [The same three components, descent, self-identification and community acceptance, are used for Torres Strait Islanders.]
This definition is preferred by the vast majority of our people over the racial definitions of the assimilationist era. ...
Sometimes, non-Aboriginal people get confused by the diversity of Aboriginal and Torres Strait Islander people, [but] ...
The lesson to be learned from this is that we should not stereotype people; that people are different, regardless of race.
From pages 2 & 3 of The Little Red, Yellow and Black (and green and blue and white) Book: A short guide to Indigenous Australia (1993), by W J A Jonas and M Langton, Australian Institute of Aboriginal and Torres Strait Islander Studies on behalf of the Council for Aboriginal Reconciliation.