...one in two Australian adults will experience mental
ill-health at some point – this is 7.3 million Australians
Professor Allan Fels,
Chair, National Mental Health Commission
Mental health in Australia
The National Mental Health Commission (the Commission) begins its Review
of Mental Health Services and Programme Delivery report with a stark set of
facts about the prevalence of mental ill-health in Australia:
Each year, it is estimated that more than 3.6 million people
(aged 16 to 85 years) experience mental ill-health problems—representing about
20 per cent of adults. In addition, almost 600,000 children and youth between
the ages of four and 17 were affected by a clinically significant mental health
problem. Over a lifetime, nearly half of
the Australian adult population will experience mental illness at some
point—equating to nearly 7.3 million Australians aged 16 to 85. Less than half will access treatment.
There are an estimated 9,000 premature deaths each year among
people with a severe mental illness. The
gap in life expectancy for people with psychosis compared to the general
population is estimated to be between 14 and 23 years.
The Commission found that mental ill-health poses a significant economic
and social burden on Australia. This chapter provides information about the
Commission's finding in this regard, as well as information about the structure
of the mental health system in Australia.
Economic costs of mental ill-health
In his address to the National Press Club on 5 August 2015, Professor Allan
Fels, the Chair of the National Mental Health Commission emphasised the
economic costs of mental ill-health to Australia:
As an economist, I want to emphasise that mental health is a
significant problem for our economy – as significant as, often more significant
than, tax or microeconomic reform. Many people do not get the support they
need, and governments get poor returns on substantial investment. The economic
or GDP gains from better mental health would dwarf most of the gains – often
modest ones – being talked about in current economic reform debates.
Professor Fels explained that the economic cost of untreated mental
ill-health is also being recognised internationally:
The world’s leading economic commentator, the Financial
Times’ Martin Wolf, has concluded mental ill health is the developed world’s
most pressing health problem. He said:
“Given the economic costs to society, including those caused
by unemployment, disability, poor performance at work and imprisonment, the
costs of treatment would pay for themselves.”
Recognition comes also from The Economist magazine which has
just published a special report on the growing incidence and costs of mental
illness and the Economist Intelligence Unit has done the same.
From Davos, the World Economic Forum has warned finance
ministers and economic advisers that they need to react to the ‘formidable
economic threat’ posed by non-communicable diseases, including mental health
The OECD estimates the average overall cost of mental health
to developed countries is about four per cent of GDP. In Australia, this would
equate to more than $60 billion or about $4,000 a year for each person who
lodges a tax return or over $10,000 per family. The costs include the direct
costs of treatment; the indirect costs e.g. disability support pensions,
imprisonment, accommodation and so on; the costs of lost output and income and
finally costs to carers and families, not to mention that their workforce
participation is held back by caring demands.
In Australia, the Commission's review found that the economic cost of
mental ill health is 'enormous':
Estimates range up to $28.6 billion a year in direct and
indirect costs, with lost productivity and job turnover costing a further $12
billion a year – collectively $40 billion a year, or more than two per cent of
Social costs of mental ill-health
In addition to these substantial economic costs, mental ill-health
imposes a significant social cost burden. The Commission stated that:
...there are significant and often unquantifiable personal
costs associated with mental illness for individuals and their families and
other support people. For Aboriginal and Torres Strait Islander people, there
is evidence to suggest that mental ill-health is contributing to the
unacceptably high rates of incarceration, unemployment, unsafe communities,
school truancy and the continuation of deep and entrenched poverty in some
communities. This also applies to other people who are socio-economically
The significance of these direct and indirect costs means
that mental ill‑health impacts not only the individual, their families
and other support people, but also the standard of living of every Australian
and our communities more broadly.
Put another way, individuals with a mental illness who do not receive
adequate support are less likely to be able to participate effectively in
37.6 per cent (or 67.3 per cent with severe mental illness) are
unemployed or not in the labour force, compared to 22.3 per cent of people
without mental health conditions.
38.1 per cent are in full-time employment compared to 55.3 per
cent of people without mental health difficulties.
31.5 per cent of people living with psychosis complete high
school, compared to 53.0 per cent in the general community.
20.9 per cent are in households in the lowest income bracket,
compared to 15.6 per cent of people with no mental illness.
26 per cent of people with a mental illness have government
pensions and allowances as their main income, increasing to 85 per cent of
people living with a psychotic illness, compared to 21.6 per cent for people
without mental illness.
The Commission also noted that there are poorer outcomes for people with
a mental illness in terms of the justice system:
Of the 29,000 people in prisons in Australia in 2012, it is
estimated that 38 per cent had a history of mental illness—a rate almost twice
that seen in the general population.
In New South Wales, the annual number of police incidents
involving people with a mental health problem increased by 25 per cent, from
around 22,000 in 2007–08 to around 30,000 in 2011–12.
Across Australia over the 11 years from 1989–90 to 2010–11,
42 per cent of people shot by police had a mental illness.
Current state of mental ill-health in Australia
The Commission identified mental ill health ranges from mild-moderate to
severe and persistent. The figure below, taken from the review, shows the
spectrum of mental ill-health in the Australian population. It is important to
appreciate that mental ill-health is on a broad spectrum when examining issues
such as access to mental health services, ongoing treatment, and economic
Figure 1—Annual distribution of
mental ill-health in Australia
The Commission's research shows that many of those who experience a
mental illness to not seek support:
...rates of help-seeking and treatment much lower than
prevalence in the community. Latest statistics suggest about 46 per cent of
people with a mental ill-health problem seek help each year.
Dr Michelle Blanchard, the Head of Projects and Partnerships at the
Young and Well Cooperative Research Centre told the committee that this is
particularly true for young people with a mental illness:
In the case of young people, 25 per cent of young people
experience a mental health difficulty and 70 per cent of those do not seek help
and do not receive care. It is a very high figure for a younger population, and
that figure is higher again for young men...
We know from international evidence that the time between the
onset of symptoms for someone with a mental illness and the time they receive
the right care is up to 10 years.
The review described the current state of mental health in Australia
with the following points:
People with lived experience, families and support people have a
poor experience of care;
A mental health system that doesn't prioritise people's needs;
A system that responds too late;
A mental health system that is fragmented;
A system that does not see the whole person;
A system that uses resources poorly.
Current government mental health spending
The Commission's review found that in 2012-13 Commonwealth Government
expenditure on mental health, spread across 16 agencies, was almost $10 billion
to fund mental health and suicide prevention programmes. The breakdown of this
spending is summarised in Figure 2 below.
The Commission noted that of Commonwealth spending on mental health,
87.5 per cent funds five major programmes:
Four of these are demand-driven programmes providing benefits
to individuals. The fifth major area of expenditure is an estimated $1 billion
per year provided to the states and territories under the 2011 National Health
Reform Agreement (NHRA) for treatment of patients with a mental health need in
the public hospital system, including an estimated $280 million for
patients in standalone psychiatric institutions.
Figure 2 shows that the largest amount—almost 90 per cent—of
Commonwealth expenditure is spent on 'downstream' funding in the form of disability
benefits and income support.
Figure 2—Commonwealth expenditure on mental health
The Commission requested, and received, information from 16 Commonwealth
agencies which it used to ascertain the amount and division of Commonwealth
spending on mental health services and programmes. The breakdown of this
spending for 2012-13 is:
- $8.4 billion (87.5 per cent) on benefits and
activity-related payments in five programme areas:
Disability Support Pension (DSP) $4,700m
National Health Reform Agreement (Activity Based Funding—ABF)
Carer Payment and Allowance (CP) $1,000m
Medicare Benefits Schedule (MBS) $900m
Pharmaceutical Benefits Scheme (PBS) $800m
- $533.8 million (5.6 per cent) through programmes and
services with Commonwealth agencies and payments to states and territories:
DVA and Defence programmes ($192.3m)
Private Health Insurance Rebate for mental health-related costs
Payments to states and territories for specific programmes
(perinatal depression, suicide prevention, National Partnership Agreement
Supporting Mental Health Reform) ($169.0m)
National Health and Medical Research Council (NHMRC) research
- $606 million allocated by the Department of Health (DoH),
the Department of Social Services (DSS) and the Department of the Prime
Minister and Cabinet (PM&C) on programmes delivered by NGOs.
DoH spent $362 million on 55 grant programmes, including payments
to 213 NGOs, representing 11 per cent of total mental health-related
expenditure from this department.
DSS spent $180 million on six grant programmes, including
payments to 196 NGOs, representing three per cent of total mental
health-related expenditure from this department.
PM&C spent $64 million on three grant programmes, including
payments to 133 NGOs (the proportion of total mental health‑related
expenditure that this represented was not available).
Financial risks for the
The Commission argued that the current structure of Commonwealth funding
'creates significant exposure to financial risk':
As a major downstream funder of benefits and income support, any
failure or gaps in upstream services means that as people become more unwell,
they consume more of the types of income supports and benefits which are funded
by the Commonwealth.
Those risks also fall back on state and territory crisis
teams, emergency departments (EDs) and acute hospital services, so it is in the
best interests of the Commonwealth and the states and territories to work
together to achieve the best outcomes for individuals and communities and
minimise costs to taxpayers.
National Mental Health Commission
The Commission was established by the Governor General as an Executive
Agency under the Public Service Act 1999 within the Prime Minister's portfolio,
on 1 January 2012. The Commission describes its purpose as to provide
independent reports and advice to the community and government on mental health
services, programmes, and 'on what's working and what's not.'
The Commission's mission is to:
...give mental health and suicide prevention national
attention, to influence reform and to help people live contributing lives by
reporting, advising and collaborating.
With Machinery of Government changes announced after the September 2013
election, the Commission was transferred to the Health portfolio. It is
formally accountable to the Minister for Health. Advice from the Commission to the
Government is provided via the Minister for Health under cover of a brief,
letter or report from the Chair and/or the CEO of the Commission.
Professor Fels responded to criticism of the Commission's move into the
Contrary to some media reports suggesting the Commission will
be absorbed into the Department of Health, the Commission understands it will
simply now report to the new [now former] Health Minister, The Hon Peter Dutton
Chair Professor Allan Fels said, "Our independence is
critical to credible reporting and advice and to driving transparency and
"As I have said previously, we will continue to bring a
whole of life, whole of portfolio perspective to our work. In doing so, we will
provide clear, independent advice to Government and engage with all relevant
portfolios and sectors.
The Commission undertakes a range of work towards the purpose of
promoting mental health and providing advice to Government. Its work includes:
In 2012 and 2013 we produced two annual National Report Cards
on Mental Health and Suicide Prevention. The report cards inform Australians
of where we are doing well and where we need to do better in mental health. As
well as looking at the facts and figures, the report card tells the real and
everyday experiences of Australians. We will be reporting back on all our
recommendations at the end of the year.
The Commission is working with the Australian Commission on
Safety and Quality in Health Care (ACSQHC) on a scoping study on the
implementation of national standards in mental health services.
In 2013, Expert Reference Group chaired by Professor Allan
Fels AO provided a report to the COAG Working Group on Mental Health Reform
regarding National Targets and Indicators for mental health reform.
We also coordinate Spotlight Reports to shine a light on
issues and areas of interest identified by the Commission. These reports are
commissioned to inform our work and do not necessarily reflect the views of the
The Commission has spent a large part of 2014 conducting its review of
mental health programmes and services, which it delivered to the Government on
1 December 2014. The Government subsequently released the Commission's
report on 16 April 2015, after parts of the report were leaked to the media.
The focus of the Commission's review was on 'assessing the efficiency
and effectiveness of programmes and services in supporting individuals
experiencing mental ill-health and their families and other support people to
lead a contributing life and to engage productively in the community.'
The review delivered a series of findings and 25 recommendations which, if
...create a system to support the mental health and wellbeing
of individuals, families and communities in ways that enables people to live
contributing lives and participate as fully as possible as members of thriving
The Commission's report and the Government's initial reaction are
discussed in Chapters 3 and 4 respectively.
Previous mental health inquiries
The Commission's review is the latest in a long line of reviews and
inquiries which have considered the most effective and efficient means of
delivering mental health services and programmes. Mr Sebastian Rosenberg, a
Senior Lecturer at the University of Sydney's Brain and Mind Centre reflected
on these past inquiries:
Despite four national plans and two national policies, one
road map, two report cards and one action plan, genuine mental health reform
seems as far away as ever. There is a sense that things have changed and that
the asylums have closed in Australia. Well, there are still 1,831 beds in
asylums across Australia costing about half a billion dollars per year. Large
elements of the old system are still very much in place in our current system... One
of the main things that was through all the history of Australian mental health
policies and plans has been the desire to establish community-based mental
health care, but in fact what we have is an extremely hospital‑focused
system of care. Even when the National Mental Health Commission suggested a
very small change to those arrangements, Minister Ley unfortunately seemed to
indicate that that would not be pursued.
We were interested very much in promotion, prevention and
early intervention, but in fact we have a system which really is about
postvention and crisis management.
We were very much interested in e-mental health technologies,
some of which Australia has led in, but in fact what we have is a continued
dependence on face-to-face care and fee-for-service type approaches.
Mr Rosenberg observed that there had been '32 separate inquiries into
mental health between 2006 and 2012'.
He cited the Senate Select Committee on Mental Health's inquiry as being of
Here is the Senate's recommendations from 2006. They were
excellent. The reform of mental health care really depends on filling the gap
between the GP and the hospital. There needs to be an establishment of good
community mental health services, and this was a key recommendation that the
Senate [Select Committee on Mental Health] made in 2006. The issue here is that
nobody owns community mental health. It falls between the federal government
and the state government in terms of responsibility... despite recent changes to
funding arrangements and so on, the mental health share of the health budget is
in decline. The mental health system remains in crisis. New funding into
existing failed systems is a terrible idea. What we need is a new approach
based on genuine community access to mental health care which combines both
clinical and non-clinical elements of support.
The Senate Select Committee on Mental Health was appointed on
8 March 2005 and its terms of reference included, amongst others:
the adequacy of various modes of care for people with a mental
the extent to which unmet need in supported accommodation,
employment, family and social support services, is a barrier to better mental
the special needs of groups such as children...Indigenous
Australians, the socially and geographically isolated;
the role of primary health care in promotion, prevention, early
detection and chronic care management;
the adequacy of education in de-stigmatising mental illness;
the current state of mental health research, the adequacy of its
funding and the extent to which best practice is disseminated;
the adequacy of data collection, outcome measures and quality
control for monitoring and evaluating mental health services at all levels of
the potential for new modes of delivery of mental health care,
The Select Committee prepared two reports, the first on 30 March 2006
and the final report on 28 April 2006.
The two reports were necessitated by a February 2006 decision by the Council of
Australian Governments (COAG) to begin a process of discussion and policy
development on mental health. In order to input into the COAG process, the
committee decided to make an initial early report of its findings and those recommendations
relating to COAG. A follow up report was then published, with the remaining
Overall, the Select Committee on Mental Health found that:
...there is much work to do in the area of mental health. There
needs to be more money, more effort and more care given to this neglected part
of our health care system. There is not enough emphasis on prevention and early
intervention. There are too many people ending up in acute care, and not enough
is being done to manage their illness in the community. There are particular
groups, and people with particular illnesses, who are receiving inadequate
care. Many of these findings have been confirmed by other organisations and
reports in recent years.
The Senate Select Committee on Health's examination of the issues around
mental health services and programmes is relatively brief in comparison with
the work done by the Senate Select Committee on Mental Health in 2005-06.
However, the committee notes that the same issues have been raised in both its
inquiry, and in the Commission's review of the delivery of mental health
services and programmes.
In looking at the work of the Commission, the issues raised by
witnesses, and the lack of government response to the Commission's review, the
committee hopes to demonstrate that once again mental health policy is at a
crossroads. Both the issues and the necessary reforms are well documented
throughout many inquiries. The committee believes that action now is essential
if Australia is to reform its mental health system. The committee will use the
remainder of the report to illustrate this conclusion.
Navigation: Previous Page | Contents | Next Page