Victoria is to be congratulated for introducing a mental health levy raising about $3 billion over four years.
Quite apart from its high social merit, the tax is an economic investment that will pay for itself over the next five to 10 years.
Mental illness costs Australia about $200 billion to $220 billion a year, about 10 per cent of GDP, according to the Productivity Commission.
A 20 per cent improvement in mental health system performance could boost GDP by 2 to 3 per cent a year, dwarfing the benefits of other commonly discussed microeconomic reforms.
Mental health has been underprioritised by both sides of politics for many years. The outcome is that the system is “broken”, to quote Premier Daniel Andrews.
Demand has vastly overwhelmed capacity at all points of the system. Services cannot keep up with the number of people who seek treatment, care and support, whether they are individuals needing “primary” treatment or, at the other end of the spectrum, desperately needing treatment from crisis-driven emergency or hospital services.
Mental health issues take a heavy toll on individuals and the economy.
And services supplied outside of hospitals (“community-based mental health” and supporting services) are grossly underprovided and widely unavailable.
In fact, mental health is the standout weak point of Australia’s otherwise good health system. One indication of the underinvestment is that mental health accounts for about 13 per cent of illness but receives only about 7 per cent of the health budget. The result is that if the problems – very sad and serious human problems for many people in the community, and their families and carers – are to be fixed, if years of neglect are to be redressed, a large government investment is needed.
Note, though, that a significant part of the investment will not only improve lives that are often utterly miserable but will also save some sizeable costs.
A reformed mental health system with more prevention and early intervention and with other recommended reforms will keep many people out of avoidable, unnecessary, very costly hospital care, prisons, homelessness and badly substandard housing (which all worsen mental illness).
Now is the time for real action, for reform and real investment. The Victorian royal commission on mental health, the Productivity Commission (at national level) and Christine Morgan of the National Mental Health Commission with her report on suicide prevention have collectively provided the required, economically sensible and comprehensive blueprint for urgently needed reform.
It is essential that investing in this blueprint both by the Commonwealth and state governments is not overtaken, as so often happens in mental health, by other spending priorities.
No one likes a levy but to fund the much-needed reforms without this revenue Victoria would need to heavily cut spending on hospitals and other areas of health and welfare spending. This is not desirable nor feasible.
The Commonwealth has increased its spending on mental health substantially in the latest budget (and earlier ones).
The difference from Victoria is that the Commonwealth can fund spending by borrowing with little limit and by printing money. Victoria cannot: it needs taxes to pay for extra spending.
Fixing our tragically inadequate system means … making costly and somewhat financially painful investments.
As to big employers paying, the question is: which is the least undesirable way of imposing a necessary tax? Employer gains from the mental health reforms will be considerable: there will be reduced absenteeism and reduced “presentee-ism” – that is, the inability of people with mental illness to perform productively in the workplace.
Employment will gain from a big increase in participation in the workforce, especially by people with mild and moderate forms of mental illness. This is a key source of productivity gain for business and the state.
Not only do I support the mental health levy for Victoria, but other states need a levy to enable them to lift their performance. And the Commonwealth continues to need to invest in mental health and join with Victoria and other states in boosting mental health, especially in the badly “missing middle” – that is, out-of-hospital treatment of those with mental illness.
Many politicians and others acknowledge that the mental health system is in crisis, with disturbing effects on large numbers of our community. But repairing mental health requires more than just ritualistic acknowledgement and marginal spending increases.
Fixing our tragically inadequate system means adopting recommended major system reforms and making costly and somewhat financially painful investments. We need our Parliament to demonstrate a genuine, not a token, commitment – a real financial commitment expressed in a mental health levy – to support the countless Victorians and their families experiencing deeply distressing mental health experiences.
We have not seen this commitment from either side of politics until now. Let us hope our parliamentary members rise to the challenge.
Professor Allan Fels is former chair of the Australian National Mental Health Commission and former commissioner of the recent Victorian royal commission into mental health.
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