2013-14 was the third consecutive year the gap between Indigenous and non-Indigenous youth incarceration rates increased nationally, new figures from the Australian Institute of Health and Welfare (AIHW) show.

Indigenous children and teenagers are 24 times more likely to be incarcerated than their non-Indigenous peers, with the difference even more stark in Western Australia, according to AIHW's Youth Justice in Australia report.

In WA, Indigenous people aged 10-17 are 52 times more likely to be incarcerated than non-Indigenous children, while one in nine Indigenous boys in WA spent time in detention or community-based supervision in 2013-14.

Nationally, Indigenous and non-Indigenous supervision rates had widened because the numbers and rates had "fallen faster for non-Indigenous young people than for Indigenous young people", AIHW spokeswoman Justine Boland said.

Across Australia, the non-Indigenous supervision rate (which includes community-based supervision and detention) fell by 25 per cent in the five years to 2013-14. The Indigenous rate fell by 10 per cent.

The gap in incarceration rates has grown every year since 2010-11. For community-based supervision the gap increased for a fourth consecutive year, with Indigenous youths 14 times more likely to face this sanction.

"The development of programs in juvenile justice hasn't taken enough consideration of the specific requirements of Aboriginal young people," University of NSW criminologist Chris Cunneen said.

"It needs to begin in the community, with some level of community control."

Initiatives to divert young people from prison, which contributed to last year's unprecedented drop in youth justice supervision numbers, have not benefited Indigenous people, Professor Cunneen said.

At the same time, punitive measures – such as mandatory sentencing in WA, the removal of the principle of imprisonment as a last resort in Queensland and the abolition of youth drug courts in Queensland and NSW – disproportionately affect Aboriginal people, he said.

Nationally, about 6100 people aged 10-17 are under justice supervision on an average day. Nearly half are Indigenous.

The figure worsens when it comes to incarceration. Indigenous youths make up 6 per cent of the population aged 10-17, but 58 per cent of incarcerated youths.

University of Western Australia criminologist Harry Blagg said Australia needed to reduce Aboriginal distrust of the justice system. "The reason they [youth justice diversion programs] haven't worked for Indigenous youth is that our system is still too culturally white," he said.

"Those underlying issues pointed out in the Royal Commission into Aboriginal Deaths in Custody – that Aboriginal people are amongst the most deprived and marginalised groups in Australia – that hasn't changed."

The most disadvantaged youths are seven times more likely to be under supervision than the most advantaged, according to the report. Similarly, young people in very remote areas are seven times more likely to be under justice supervision than those in major cities.

Professor Blagg said the compounding effect of layers of disadvantage, including cognitive problems caused by mothers drinking during pregnancy, repeatedly brought  Aboriginal children into contact with the justice system.

"We have intergenerational trauma. We have the consequences of family violence, with young people preferring to be on the street than at home. We have ongoing problems with a lack of engagement with the education system. We have high rates of youth suicide," he said.

"There is still a strong sense among Aboriginal youth that life has little to offer."

In NSW, previous studies from the Bureau of Crime Statistics and Research have linked the trend to an increase in the number of juveniles being refused bail. A more punitive approach to bail eligibility would have harsher consequences for Indigenous people "because Aboriginal kids are more likely to have a prior offending history", Professor Cunneen said.

BOCSAR director Don Weatherburn said Indigenous people tended to commit different kinds of crimes to non-indigenous people, which may partly explain the widening gap in youth supervision rates. He said juvenile arrest rates had seen "a huge decline" but mostly in relation to property crime.

"Aboriginal people are disproportionately involved in violent offences," he said. "They're doing the wrong kind of offences to get the full benefit of the reduction in arrest rates."