Australia's mental health system is in crisis, according to a recent inquiry by the Productivity Commission. The commission's report, delivered to the government on October 16 and published recently, criticizes the National Mental Health and Suicide Prevention Agreement signed three years ago. It states that the agreement is failing to provide adequate support for many Australians in need of mental health services.

The inquiry highlights that approximately 500,000 Australians lack access to specialist mental health care, as these services are primarily available through the National Disability Insurance Scheme (NDIS). The commission calls for an immediate solution to this issue, emphasizing that the current system is out of reach for many individuals.

The report reveals alarming statistics: around 3,000 Australians die by suicide each year, and one in five Australians experiences mental illness. The economic impact of these issues is estimated to exceed $200 billion annually. The commission noted, "In the three years since the [National Mental Health] Agreement was signed, little has improved for the people who access mental health and suicide prevention services, and their supporters, family, carers and kin."

The inquiry also points to significant events, such as the COVID-19 pandemic and the unsuccessful Voice to Parliament referendum, as contributing factors to the decline in mental health among Australians. It identifies fundamental flaws in the national mental health strategy and recommends a complete rewrite of the agreement, along with a one-year extension of its 2026 expiration to allow for necessary redesign.

Health Minister Mark Butler acknowledged the report's findings and expressed the need for reform. He stated, "This is an opportunity to reset and get this right. We must amplify the voices of people with lived experience and ensure future arrangements present a clear, long-term vision for improving mental health outcomes and reducing suicide."

The National Mental Health and Suicide Prevention Agreement, which was intended to address gaps in the mental health system, has not yielded the expected improvements. Despite an increase in mental health spending to approximately $12.6 billion annually, suicide rates among Aboriginal and Torres Strait Islander people have worsened, rising from 25 per 100,000 in 2021 to 30 in 2023.

The report also found that 40% of individuals aged 15 and older have delayed seeking care, with financial barriers being a significant factor, particularly for lower-income households. The commission criticized the agreement for making minimal progress, citing unclear roles for federal and state governments, undefined targets, and a lack of reporting mechanisms.

Additionally, the commission recommended reinstating the National Mental Health Commission as an independent body to renew the national strategy, which has not been updated in 17 years. It also suggested increasing funding under the agreement to about $1 billion annually, particularly for those with psychosocial conditions who are not eligible for the NDIS.