The State of Reconciliation in Australia report, released on Tuesday, found the vast majority of people – 86 per cent – believed the relationship between indigenous and other Australians was important.
But it also found a third of Aboriginal and Torres Strait Islander people had been racially abused in the six months before the survey.
Only 30 per cent of the general community socialise with indigenous people, the report also found.
Reconciliation CEO Justin Mohamed says Australia will always be held back until it moves to zero tolerance ofracism.
“We know that racism over the last 18 months and through a number of different events has seen the nation that we aren’t proud of,” he told ABC TV.
Mr Mohamed cited a number of other matters and “unresolved conversations” impeding reconciliation.
They included constitutional recognition, a sovereignty treaty and discussions about new agreements and arrangements with indigenous communities.
The government’s Closing the Gap policy also needed renewal.
“It hasn’t reached the heights that we want it to reach,” Mr Mohamed said.
Prime Minister Malcolm Turnbull will deliver the annual progress report of Closing the Gap targets on Wednesday.
Opposition Leader Bill Shorten said the nation needed to adopt a “partnership of equals”.
It required building trust and cooperation, embedding respect in all parts of society, eliminating racism and valuing the world’s oldest living culture “as part of modern Australian culture”.
“Equal opportunity is not a politically correct term. Equal opportunity is what constitutes reconciliation,” Mr Shorten said.