Given the significant disparities in health and health related disadvantage between Aboriginal andnon-Aboriginal Australians, the application of somenotion of equity has a role to play in the formulationof policy with respect to Aboriginal health. Aboriginal andTorres Strait Islander has been abbreviated to Aboriginal. There has been considerable debate in Australia as to what the principles of equity should be. This paper discussesthe relevance of the principle of vertical equity (theunequal, but equitable, treatment of unequals) toAboriginal health funding. In particular, the (...) paperadvocates pursuing procedural justice as the basis forvertical equity where the focus is on the fairness ofhow things are done rather than on the distribution ofoutcomes per se (i.e. distributive justice).Particular attention is paid to how the principle ofvertical equity might be handled at a practical level.Details of the approach used in a number of Australianindigenous communities are discussed. It is concludedthat there are strong arguments for pursuingprocedural justice under vertical equity particularlywhen there are cultural differences in the ways healthis defined and when there is importance attached toindigenous involvement in the health care decisionmaking process. (shrink)