Mental health centrepiece of this year s health budget

Budget Review 2011-12 Index

Budget 2011–12: Mental health—centrepiece of this year’s health budget

Anne-marie Boxall

Investment in the mental health sector is undoubtedly the feature of this year’s health budget, with the total package amounting to a $2.2 billion investment over five years.[1] Of this, $1.5 billion worth of funding is for new initiatives or to expand existing ones. The remaining $700 million is for mental health initiatives announced last financial year, most of them in the 2010–11 Budget and 2010–11 Mid-Year Economic and Fiscal Outlook.[2]

The most significant new funding measures for mental health include:

  • $419.7 million over five years to establish up to 12 new Early Psychosis Prevention and Intervention Centres (EPICC), and 30 new headspace sites to help young people with or at risk of mental illness
  • $343.8 million over five years to provide more coordinated care services to people with severe mental illnesses
  • $269.3 million over five years for community mental health services, in particular to expand Family Mental Health support services and increase the number of personal helpers, mentors, and respite care services
  • $201.3 million over five years for a National Partnership Agreement on Mental Health. Funds from this agreement would be made available to state and territory governments on a competitive basis for projects designed to address major gaps in mental health services and
  • $205.9 million over five years to expand access to the Access to Allied Psychological services programs in hard to reach and low socioeconomic areas.[3]

Other important initiatives include the establishment of a Mental Health Commission and an online portal to make it easier for people to find and access mental health services.

The initiatives outlined in the Budget broadly accord with the priorities for investment outlined in a blueprint for mental health reform published by an Independent Mental Health Reform Group in March this year.[4] With its strong focus on expanding access to EPICC and headspace centres, the Government’s reforms closely match the Coalition’s Real Action Plan for Mental Health, released in August 2010.[5] However, the Government’s priorities do vary from some of those announced by the Coalition in April this year.[6] For example, there is relatively small investment in programs to help people with mental illnesses participate in the workforce in this Budget ($2.4 million over five years), no dedicated funding for mental health research and no new initiatives to boost the mental health workforce.

There has been widespread support in the health sector for the Budget initiatives.[7] The reaction this year is notable because the Government was strongly criticised after the last budget for its lack of investment in mental health.[8] This year, some of the key critics (for example former Australian of the Year, Professor Patrick McGorry, and Professor John Mendoza, who resigned from the Mental Health Council of Australia in protest over the inaction on mental health) have welcomed the Government’s mental health reforms.[9] Professor Mendoza reportedly was so impressed with the package that he offered to work with the Government once again on mental health reform.[10] Professor McGorry’s response was more subdued but he lauded this year’s investments in mental health as an excellent first step.[11] And another key advocate, Professor Ian Hickie, has reportedly been ‘fairly gushing with praise’ for the Prime Minister and Mental Health Minister, Mark Butler, because of the role they played in getting mental health funding into the budget.[12]

Criticisms about the Government’s mental health reforms have been largely restricted to professional groups whose members are currently the main beneficiaries of the Better Access to Psychiatrists, Psychologists and General Practitioners Initiative (Better Access Initiative): the Australian Medical Association (AMA) and Australian Psychological Society (APS).[13] The Better Access Initiative (which provides Medicare rebates to patients receiving mental health care from doctors, psychologists and other allied health professionals) will continue to be funded. However, this Budget seeks to reduce the rebate for some mental health services that General Practitioners (GPs) provide (in particular the rebate for developing mental health treatment plans) and limit the number of Medicare-funded treatment sessions that can be provided by allied health professionals. Savings will be redirected into some of the other mental health initiatives outlined earlier.

The AMA has protested against the changes to the Better Access Initiative by arguing that the changes will make it more expensive for patients and devalue the role of GPs in managing community mental health.[14] The APS argue that the changes will undermine what it considers to be the most successful program in mental health in the last 30 years, one that has been proven to be cost-effective.[15]

Although the critical responses of the AMA and APS stand out because the majority of the sector has been so positive, they do highlight one important issue that has gone largely unnoticed in this Budget: it ushers in an important change to the way mental health services in Australia will be funded. This Budget directs funding away from fee-for-service provision by individual health professionals (such as GPs) and prioritises instead multidisciplinary services provided by community health centres, Medicare Locals and other non-government organisations, which will be funded through block grants.

Many health experts have been arguing for a long time that fee-for-service medicine that is the backbone of the Medicare system is not well suited to preventing and managing chronic diseases, including mental illnesses.[16] It encourages health professionals to focus on acute management of symptoms rather than preventing disease or managing the symptoms effectively over time. The Government made a small attempt to move away from fee-for-service practice in the last Budget with its Coordinated Diabetes Care initiative. However, after strong protest from the AMA, the Government announced that it would instead limit it to a pilot program running for three to four years.[17] These subtle changes in funding arrangements for mental health are unlikely to result in large-scale changes to the way health services are funded and delivered in Australia in the short-term, but they may have an impact over the longer-term if experts can show that they have contributed to tangible improvements in health outcomes for people with mental illnesses.

[1].       Australian Government, Budget 2011–12: Delivering better hospitals, mental health and health services, Commonwealth of Australia, budget statement, Canberra, 2011, p. 24.

[2].       Australian Government, Budget measures: budget paper no. 2: 2011–12, Commonwealth of Australia, Canberra, 2011.

[3].       Ibid.

[4].       Independent Mental Health Reform Group, Including, Connecting, Contributing: A Blueprint to Transform Mental Health and Social Participation in Australia, Brain and Mind Institute, The University of Sydney, Sydney, March 2011, viewed 11 May 2011,

[5].       Liberal Party of Australia, The Coalition’s real action plan for mental health, Coalition policy document, 5 August 2010, Election 2010, viewed 11 May 2011,

[6].       T Abbott (Leader of the Opposition), P Dutton (Shadow Minister for Health and Ageing) and C Fierravanti-Wells (Shadow Minister for Mental Health), Further support for mental health, media release, 21 April 2011, viewed 11 May 2011,;query=Id%3A%22media%2Fpressrel%2F713522%22

[7].       See for example: Get Up! Acton for Australia, Mental health experts welcome reform budget: comment from Professors McGorry, Mendoza, Hickie, media release, 10 May 2011; Australian Healthcare & Hospitals Association, Budget good for mental health, media release, 10 May 2011; Mental Health Council of Australia, Gillard Government delivers on mental health commitments, media release, 10 May 2011.

[8].       See for example: M Mack, ‘Huge inequities in mental health funding’, Independent Weekly, 21 May 2010, p. 4, viewed 12 May 2011,;query=Id%3A%22media%2Fpressclp%2F6QTW6%22 D Cronin, ‘Mental health sufferers face form of ‘apartheid’’, The Canberra Times, 28 May 2010, p. 2, viewed 12 May 2011,;query=Id%3A%22media%2Fpressclp%2FE8UW6%22  M Sweet, ‘Senior advisor attacks “mad” health reform for its neglect of mental health’, Croakey blog, Crikey website, 3 May 2010, viewed 12 May 2011,

[9].       J Drape, ‘Experts praise Labor’s mental health plan’,, 10 May 2011, viewed 12 May 2011,

[10].     Ibid.

[11].     Ibid.

[12].     M Sweet, ‘Mental health: PM, Butler get credit – are professions up to implementation?’, Crikey website, 11 May 2011, viewed 12 May 2011,

[13].     Australian Medical Association, Federal Budget 2011-2012 Budget makes it more expensive for people to see their family doctor for mental health care, media release, 10 May 2011; The Australian Psychological Society Ltd, Hidden cost in welcome investments in mental health, media release, 11 May 2011; Department of Health and Ageing website, ‘Better access to psychiatrists, psychologists and general practitioners through the MBS (Better Access) initiative’ page, DOHA website, viewed 12 May 2011,

[14].     Australian Medical Association, Federal Budget 2011-2012. Budget makes it more expensive for people to see their family doctor for mental health care, media release, 10 May 2011.

[15].    The Australian Psychological Society, Hidden cost in welcome investments in mental health, media release, 11 May 2011.

[16].     H Swerissen, Funding programs for chronic disease prevention and management, Chronic Disease Management Forum speech, Brisbane, 8 November 2006.

[17].     N Roxon (Minister for Health and Ageing), Early pilot of diabetes coordinated care to begin July 2011, media release, 12 November 2010, viewed 12 May 2011, A Pesce, Address to the National Press Club, speech, 21 July 2010, viewed 12 May 2011,;query=Id%3A%22emms%2Femms%2F176601%22