Expenditure on mental health-related services

This section reviews the available information on recurrent expenditure (running costs) for mental health-related services in Australia. Health expenditure (what was spent) and health funding (funding provided and who provided the funds) are distinct but related concepts essential to understanding the financial resources used by the health system. Data on expenditure and funding, calculated in both current and constant prices, are derived from a variety of sources, as outlined in the data source section.

As most data presented is for the 2018–19 period, constant prices are adjusted to 2018–19 levels, including more recent 2019–20 Australian Government Medicare expenditure and mental health-related medications subsidised under the Pharmaceutical Benefits Scheme (PBS) and Repatriation Pharmaceutical Benefits Scheme (RPBS) expenditure data, where data is presented in time series. Further information on health expenditure is also available in Health expenditure Australia 2018–19 (AIHW 2020).

Data downloads:

Expenditure on mental health-related services 2018–19 tables (518KB XLSX)

Expenditure on mental health-related services 2018–19 section (348KB PDF)

Expenditure on mental health-related services interactive data

Data source and key concepts related to this section

Data coverage includes the time period 1992–93 to 2018–19. Australian Government Medicare expenditure and mental health-related medications subsidised under the PBS and RPBS expenditure data for 2019–20 in this section were last updated in May 2021.

Key points

 

  • $10.6 billion, or $420 per person, was spent on mental health-related services in Australia during 2018–19, a real increase from $396 per person in 2014–15.
  • 1.5% annual average increase in the real per capita spending on mental health-related services from 2014–15 to 2018–19.
  • 7.8% of government health expenditure was spent on mental health-related services in 2018–19.
  • $6.5 billion was spent on state/territory mental health services in 2018–19; $2.8b on public hospital services; $2.4b on community services.
  • $1.4 billion, or $52 per Australian, was spent by the Australian Government on benefits for Medicare-subsidised mental health-specific services in 2019–20.

  • $566 million, or $22 per Australian, was spent by the Australian Government on subsidised mental health-related prescriptions under the PBS/RPBS during 2019–20.

Overview

In 2018–19, the national recurrent expenditure on mental health-related services was estimated to be $10.6 billion. This represents an annual average increase of 3.1% since 2014–15, adjusted for inflation. Overall, national expenditure on mental health-related services increased from $396 per Australian in 2014–15 to $420 per person during 2018–19, adjusted for inflation; an average annual increase of 1.5%.

Of the $10.6 billion spent nationally in 2018–19, state and territory governments funded 60.4% ($6.4 billion), the Australian Government 34.1% ($3.6 billion), and private health insurance funds and other third party insurers 5.5% ($584 million). These proportions have remained relatively stable over time, with 59.5% of national spending coming from state and territory governments, 35.7% from the Australian Government, and 4.8% from private health insurance funds and other third party insurers in 2014–15.

Government expenditure on mental health-related services in 2018–19 was estimated to be around 7.8% of total government health expenditure, steady from 2014–15 but an increase from 7.3% in 1992–93 when data collection began.

Funding from the Australian Government for mental health-related services (adjusted for inflation) has increased by an average annual rate of 2.1% over the period 2014–15 to 2018–19, while funding from state and territory governments increased by an average annual rate of 3.4%.

The National Mental Health Commission’s 2014 Review of Mental Health Programmes and Services (NMHC 2014) used a broader methodology to estimate Australian Government expenditure on mental health. The methodology included broader mental health-related costs, such as the Disability Support Pension and Carer Payment and Carer Allowance. The Australian Government mental health-related expenditure in 2012–13 was estimated to be $9.6 billion (in current terms), compared to $2.8 billion using the methodology employed in this publication, as outlined in the data source section. More recently, the Productivity Commission’s Inquiry into Mental Health examined the costs to governments, individuals and insurers of mental healthcare and related services, including broader services such as housing, employment and education as well as expenditure on treatment, research, and promotion and prevention. The Productivity Commission estimated this cost in 2018–19 was $15.5 billion (Productivity Commission 2020), compared to $10.6 billion in this report.