The Community Services and Ethnic Affairs Department was created on 14 December 1987. Previously known as the Community Services Department the main difference in the policy for the Aboriginal and Torres Strait Islanders was the change towards a supportive rather than a directive role with programmes and activities established to transfer administrative responsibilities to Aboriginal Councils. The Department ran the Kowanyama Mission in 1987. In 1989, the Department was amalgamated with the Department of Family Services under the new name of Department of Family Services and Aboriginal and Islander Affairs.
The Department of Community Services and Ethnic Affairs was established when Community Services included the administration of Ethnic Affairs in its responsibilities. The name was changed by proclamation on 14 December 1987.
The policy of the Department was to assist Aborigines and Torres Strait people to achieve economic and social growth in their communities through the effective management of natural and human resources, with the ultimate goal of full participation and self-determination, a move towards a supportive rather than a directive role for the Department. There were programmes and activities put in place to gradually transfer administrative responsibilities, resources and personnel to the Aboriginal Councils.
The Ethnic Affairs Office provided support and assistance to ethnic communities towards self sufficiency, encouraging multiculturalism.
On 7 December 1989 the Department of Community Services and Ethnic Affairs was amalgamated with the Department of Family Services under the new name of Department of Family Services and Aboriginal and Islander Affairs.