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When the ambition for mental health reform exceeds the Federal Budget’s funding allocation, how to respond?

Introduction by Croakey: The Federal Budget has created some “grand opportunities” for mental health reform despite funding constraints, according to policy analyst Dr Sebastian Rosenberg.

A question now is how to marshall the mental health sector to ensure effective, constructive responses, he writes below.


Sebastian Rosenberg writes:

The 2024 Federal Budget provides an additional $888.1 million for mental health, over eight years. This is the first time I can remember a mental health package being set out over such a long timeframe, as opposed to the usual forward estimates (three years beyond the current budget).

The overall scale of the investment is small and in a context where mental health currently receives just under 6.8 percent of the total health budget, the lowest share since 1992 when the National Mental Health Strategy began.

Budget 2024 will not arrest this decline. And by way of comparison, Medicare spending on the existing Better Access Program is more than $23 million weekly ($1.2 billion in 2022-23).At the same time, an Australian Institute of Health and Welfare report, The Australian Burden of Disease Study 2023, found the burden of disease associated cancer, musculoskeletal and cardiovascular diseases all declined, while mental health and substance abuse disorders increased, now accounting for 15 percent of all Disability Adjusted Life Years (DALYs).

I provide this background to give an idea of the scale of the problems facing mental health reform. I am reminded here of the words of former Prime Minister John Howard, when in 2006 and first introducing psychology services to Medicare, he explained there would be “no quick fix” to mental health and that sustained reform was required.

In this respect, I feel for Minister Mark Butler, who has returned to the Health portfolio after a decade where, despite some much larger increases in funding being provided, the Coalition Government had shown little interest in sustained mental health reform.

Federal engagement in secondary care

The key thing about this Budget is that it sets out an ambitious platform for much greater engagement by the Federal Government in the funding and delivery of community mental health services.

For some time, ‘secondary care’ services have been orphans in our mental health system, with the Federal Government focusing on Medicare-provided services and the States increasingly concerned just about keeping the lights on in our hospitals.

Partly in recognition of this, and partly to respond to the evaluation of the Better Access Program, the Federal Government has used this Budget to set out new ways for Australians to get the right mental healthcare at the right time.

A free, low‑intensity service (which I think is based on this model) will be established for people with mild mental health concerns.

From 1 January 2026, Australians will be able to access the service without a referral and receive timely, high‑quality mental health support. Once fully established, 150,000 people are expected to make use of this new national ‘early intervention’ service, costing $163.9 million.

For people with more complex needs, the Government is aiming to improve access to free mental health services through a network of walk‑in Medicare Mental Health Centres, built on the established Head to Health network.

The upgraded national network of 61 Medicare Mental Health Centres will open by 30 June 2026. They will provide clinical services for adults with moderate‑to‑severe mental health needs, with $29.8m provided to ensure that every centre can provide free access to a psychologist and psychiatrist.

Leaving aside important implications here for the professional workforce, this initiative reminds me of recommendations made a long time ago, in a galaxy far, far away.

Both the low intensity service and the new centres provide access without the usual referral from a GP, removing one potential out-of-pocket cost barrier for users, responding to some of the referral issues found in the Better Access Evaluation and in line with recent recommendations made by the Sydney Mental Health Policy Forum and advice about better responding to complex mental illness.

The Budget also provides, however, $71.7m to Primary Health Networks to build GP practices through commissioning the services of mental health nurses, counsellors, social workers and peer workers, to provide that ongoing and wraparound care and care coordination for people with high needs.

The Budget also allocates $7.7 million for national peer workforce association to mobilise, professionalise this workforce. Budget measures making medicines cheaper is also very important for many people with mental illness.

It is important to recognise that Minister Butler did some of this work before.

The last time he was Minister he put in place programs like Personal Helpers and Mentors, Partners in Recovery and the Mental Health Nurse Incentive Program.  These were all small but welcome investments in providing more mental health service options, beyond Medicare, including for people with more complex needs.

And throughout this Budget are laudable recurring themes. The need for financial and geographical equity is central to several of the initiatives, as is easier access to specialist care and more multidisciplinary models of care.

So, in some respects, here we are again. The Federal Labor Government recognising the depth and scale of the problems to be addressed in  mental health and demonstrating some willingness to take on vacant roles in community mental health service funding and delivery.

Scale and design

The key issues now are scale and design. Clearly the funding provided seems too low to provide real change at the scale necessary.

But it is in relation to design that the opportunity to properly assess the ambition underlying these changes can be assessed. The states and territories have key roles to play – they still provide some community mental health services, though these seem increasingly focused on phone calls to check on client adherence to medication regimens.

How will federal and state community mental health services evolve together?

Despite Budget changes also announced in relation to the NDIS, there remains some doubt about the future of psychosocial mental health services. These are currently woefully underfunded by both state and federal governments and not seen as legitimate, vital partners to clinical care.

The new Medicare Mental Health Centres should be multidisciplinary, blended services, bringing together both clinical and psychosocial aspects of care. The new SA Urgent Mental Health Care Centre is run by a psychosocial organisation and provides this kind of blended support.

I note that the Budget provides $882.2 million to support older Australians avoid hospital admission, be discharged from hospital earlier and improve their transition out of hospital to other appropriate care. This is a matter that also really impacts mental health.

A key design question going forward is the extent to which all governments are committed to providing the service options necessary to obviate the requirement for expensive and often traumatic hospital admission.

I note here a 2006 snapshot survey of acute psychiatric wards across Australia, which indicated that nationally, 43% of all acute beds were occupied by people who could otherwise be cared for in other settings if suitable services were available.

The National Health Reform Agreement is being reviewed now. A further design question arises regarding the extent to which the NHRA will include opportunities to expand out of hospital mental health service options.

A more general design question is the extent to which we are really clear about who needs what care, from whom, for how long and with what expected outcome?

Without this overall system design, the Budget risks perpetuating the fragmentation that currently characterises the  mental healthcare ‘system.’

Better integration between state and federal services must be underpinned by new data linkage, permitting transparency about client outcomes and journeys. For example, are the new Mental Health Centres really avoiding hospital ED presentations? This kind of joined up evaluation between the states and the Feds in mental health is rare.

In this vein, the challenge of asserting new and effective accountability for mental health remains. The future of the National Mental Health Commission is unclear, with the Budget announcing that, in the short term, it is being folded into the Department of Health.

Challenge for the sector

Post-Budget analysis always focuses on the Government and what more it could have done. There is certainly room for that here.

But another question has to be how the mental health sector can now respond.

It is clear that Minister Butler and the Government are interested in real reform, using not just the Budget but other tools like the National Health Reform Agreement and the bilateral mental health and suicide agreements (also up for review soon).  Making the most of these opportunities requires more than just new funds, especially if they are merely to be directed to old channels.

A new avenue for secondary mental healthcare in the community is emerging.

How will health professional groups and sector bodies surmount the traditional roadblocks and narrow-cast talking points, to work together with Government(s) to create a better future for mental health?

Maybe we need a mental health summit, with sufficient time and expert facilitation to set out an agreed path forward, including in key, unresolved areas like mental health workforce development.

The 2024 Budget for mental health is small, but paradoxically offers some grand opportunities.  Let’s take them.

• Dr Sebastian Rosenberg, Brain and Mind Centre, University of Sydney and Health Research Institute, University of Canberra.


See Croakey’s extensive archive of articles on mental health