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But he did not suggest introducing a new justice target.
It is Labor's policy to create a new justice target in the Closing the Gap campaign.
"One of the key recommendations of the report is the development of a holistic justice target, to improve community safety and address the alarming incarceration rates," they said in a statement.
The co-chair of the Close the Gap campaign, Mick Gooda, has also called for a justice target, saying that criminal behaviour is often a "downstream" result of poor education and employment options.
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Scullion said the push to introduce justice targets "undermines the credibility of the Close the Gap.
"I think it is about time minister Scullion took justice targets seriously".
He recommended governments "avoid mandatory sentences" and set justice targets where Indigenous people are most disproportionately represented in incarceration.
The lawsuit, filed on Thursday in the Ontario superior court of justice, targets Avid Dating Life and Avid Life Media, the Toronto-based companies that run AshleyMadison.com.
The underlying causes of the overrepresentation needed to be addressed by official justice targets in the closing the gap campaign, said Gooda.
The federal minister for Indigenous affairs, Nigel Scullion, was criticised for backing away from setting justice targets as part of the closing the gap strategy.
In a subsequent interview with Guardian Australia, Rudin said that formal federal targets to reduce Aboriginal imprisonment could work if they were applied like any other justice targets, such as targets around diverting people to drug courts.
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