This study compares metformin (current first-line medication) to pioglitazone (a newer diabetic medication currently approved for combination use). Whilst there is good evidence for the benefits of pioglitazone use in other populations, in light of the known weight gain effects of pioglitazone we believe further assessment is required in Indigenous Australians (in whom there is a strong predisposition for central fat deposition). This study will provide evidence regarding the medication appropriate for first line medication in Type 2 diabetes in this high risk population. This study will assist clinicians to make evidenced-based decisions regarding initial medical management of those with Type 2 diabetes (where there is currently a gap in evidence).