Anthony Albanese will use his annual Closing the Gap speech to acknowledge the “shock and fear” of First Nations people after the alleged terrorist attack in Perth on 26 January.

The alleged attack occurred at an Invasion Day rally attended by more than 2,500 people at Forest Place in the CBD, where a 31-year-old man allegedly threw what police have described as a homemade fragment bomb containing screws and ball-bearings surrounded by explosive liquid. The device did not detonate.

The man has been charged with one count of committing an unlawful act with intent to harm, one count of making or possessing explosives under suspicious circumstances, and one count of engaging in a terrorist act.

In a speech he is set to deliver in parliament on Thursday to mark the 18th anniversary of the apology to members of the stolen generations, the prime minister will acknowledge that the alleged attack was motivated by racism and white supremacy.

“I know that since the alleged terrorist attack in Perth, many of you have been providing comfort to people grappling with shock and fear,” his speech reads. “People imagining how much worse things could have been.

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“I want to reaffirm what I said here last week, on behalf of the government and the people of Australia. We see you. We stand with you.

“The danger of that alleged attack was real – and so was the racism and hatred behind it, motivated by a white supremacy ideology. Aboriginal and Torres Strait Islander people have the right to gather and express their views, without fear of violence.

“More than that, you have the right to a full and equal place in our nation and our future. Unburdened by discrimination or disadvantage. Empowered by opportunity and security.”

His comments follow weeks of urging by First Nations communities, and the independent Indigenous senator Lidia Thorpe, for the federal government to conduct a “comprehensive investigation” into any intelligence or policing failures in the lead-up to the incident.

Just four of the 19 Closing the Gap targets are on track in 2026, according to the annual report to be tabled in parliament on Thursday, while four – including a plan to reduce rates of suicide in Indigenous communities – are either stalled or going backwards.

But Albanese will tell parliament that they must “guard against talk of failure”, which “dismisses the aspirations and achievements of Indigenous Australians”.

“Failure is a word for those who have stopped trying – or given up listening,” his speech reads. “I make this clear today: I am not contemplating failure. Our government is not contemplating failure. We are determined to succeed.”

Albanese will also announce extra funding for Indigenous health, employment, food security, mental health and domestic violence programs, intended to help states and territories meet the revised Closing the Gap targets.

The funding includes $144.1m for Aboriginal community controlled health services, on top of the $450m in state and federal funding already announced as part of a national hospital funding agreement; and $27.4m to lower the price of 30 essential items at a further 149 remote community stores. The low-cost essentials subsidy scheme ties the price of goods such as toothpaste, nappies and flour to the prices charged in city supermarkets, and will be in place at all 225 remote community stores in the Northern Territory, Queensland, South Australia and Western Australia.

The government is also announcing $299m to double the number of participants in the remote jobs and economic development program from 3,000 to 6,000; $218.3m in funding to support the national Aboriginal and Torres Strait Islander plan to end family, domestic and sexual violence which launched earlier this week; $44.4m to support culturally-safe maternal care through the Birthing on Country program; and $13.9m to provided extended hours and a text support service to First Nations crisis hotline 13Yarn “as a matter of priority”.

The minister for Indigenous Australians, Malarndirri McCarthy, said the investment would “continue to drive changes to the way governments work with First Nations people, organisations and communities, to ensure policies and programs are developed in genuine partnership”.

The Closing the Gap targets were first set in 2008 but redesigned in 2020 by a coalition of peak bodies representing the Aboriginal and Torres Strait Islander community-controlled sector.

Scott Wilson, the deputy lead convener of the coalition of peaks, said First Nations people and organisations must be the ones to lead the solutions to closing the gap.

“We’ve seen it happen and we know it works,” he said “Our people and organisations have the knowledge and trust of their communities and that is exactly what’s needed to drive real, lasting change.