: That 75% is surprisingly high, but it is nevertheless what's happened. For another source, see Census Community Profiles ('Indigenous Profile - Australia'). That document indicates a total of 455,030 respondents who identified as Indigenous on question 7 for 2006. (ABS' best estimates of the true figures are somewhat higher for reasons noted above.)  

 : It makes more sense if you look at the way in which the questions are asked. Consider e.g. somebody who's got one Aboriginal grandparent, one English grandparent, and two who are fifth-generation Australians whose earlier ancestry isn't known. When he gets to Q7, which specifically asks if he has Aboriginal origins, he will very likely tick 'yes'. But when he gets to Q18, he has a couple of reasons to pick 'English' and/or 'Australian' in preference to 'Aboriginal'. One is that he's already acknowledged the Aboriginal side of the family. The other is that for a lot of people, Indigenous and otherwise, the Census is an annoyance to be dealt with as quickly as possible; why take the time to write in 'Aboriginal' when you can just tick a box for 'English' and/or 'Australian'? Modal issues of this sort can have surprisingly powerful effects on how people respond. (Sequencing is also an issue - the later the question is in the form, the less attention it gets from respondents.)