QUEENSLAND Premier Campbell Newman has backflipped on a decision to end indigenous welfare reform trials in Cape York.
Earlier this week Mr Newman said the state couldn't justify the cost of the program, even though it had been successful, and wouldn't fund it after 2013.
He insisted he wasn't abandoning the scheme, which has received about $100 million from the federal and Queensland governments.
He wanted a wider, more cost-effective rollout.
The trials have run since 2008 in four indigenous communities - Coen, Aurukun, Mossman Gorge and Hope Vale.
Part of the trial sees welfare payments withheld from parents who don't make decisions in the best interests of their children.
The premier's office issued a brief statement on Thursday afternoon to say the Cabinet Budget Review Committee had met and decided that it would spend another $5.65 million to extend the trial.
"We will continue to work with all indigenous communities to improve social outcomes," Mr Newman said in the statement.
Federal Opposition Leader Tony Abbott, who was in Brisbane on Thursday, said he wanted to see the reforms expanded to communities across the country.
"I'm happy to work constructively with all levels of government to make sure this happens," he said.
An independent report on the reforms, released on Thursday, said positive changes in education and social behaviour had been seen in the trial communities.
But gains in housing and economic development had been limited.
School attendance jumped - from four per cent below the rate in similar communities in 2008, to six per cent above it in 2011.
But keeping students in high school remained a significant challenge, the report said.
Residents say they're working towards becoming better parents and managing their money better to meet the needs of their families.
"Compared to three years ago, children are happier, more active and eating healthier food," the report said.
"Life is on the way up generally."
Progress was being made to remove legal and financial barriers to indigenous home ownership.
The reforms had also led to the creation of 220 jobs but had had a limited impact on the number of residents dependent on welfare.
The report concluded there could be no quick fix to challenges that were decades in the making.
"However, the trial of welfare reform points to a level of progress that has rarely been evident in previous reform programs."
The trial was supposed to end last year but was extended to December 2013 after the federal government kicked in $11.8 million.
In total, about $100 million has been spent on the reforms by federal and state governments.
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