Productivity Commission tears down flawed mental health agreement

The Productivity Commission (PC) has delivered a damning assessment of the National Mental Health and Suicide Prevention Agreement, branding it as “fundamentally flawed” and “not fit for purpose” in delivering the reform Australia’s mental health system so desperately needs.

The interim report, released as part of the Commission’s review, exposes a system burdened by disjointed initiatives, absent strategy, and empty promises. Despite being signed by federal, state, and territory governments in 2022 with lofty goals of improving outcomes for people with lived and living experience of mental ill health and suicide, the Agreement has failed to deliver even the basics.

“The Agreement comprises a raft of outputs and initiatives that aren’t connected to each other or to an overarching strategy. In its current form, it cannot deliver the systemic, coordinated change it promises,” said Commissioner Selwyn Button.

Far from delivering meaningful change, the report finds the current system is still plagued by the same chronic access issues and fractured service delivery that have defined the mental health landscape for years. A companion paper, What We’ve Heard So Far, draws on extensive first-hand accounts to underscore this failure.

“The consumers, carers and service providers we spoke with told us of ongoing challenges accessing and affording care and of uncoordinated services that do not respond to need,” Commissioner Button said.

The Agreement’s inability to deliver on a central promise – ensuring psychosocial supports for those ineligible for the NDIS – is perhaps its most glaring failure. The result? Half a million Australians with serious mental illness have been left to fall through the cracks.

“Addressing this gap requires exactly the kind of national coordination that the current Agreement has proven unable to provide,” emphasised Commissioner Angela Jackson.

The system’s structural deficiencies are further laid bare by recent data from the Australian Psychological Society, which reveals that the psychology workforce is already overwhelmed. Psychologists have the lowest clinical full-time equivalent (FTE) to headcount ratio of all Ahpra-registered professions, now down to just 61.2% compared to the all-profession average of 80.7%. Alarmingly, the sector is meeting only 35% of projected national demand.

While most of the Agreement’s listed outputs have been nominally delivered, the Commission finds they have produced little meaningful impact. Funding has been piecemeal, and critical priorities, including improving outcomes for Aboriginal and Torres Strait Islander people, remain entirely unfunded.

Governance mechanisms have also come under fire. The report slams the Agreement’s accountability measures, describing them as vague, weak, and ineffective. Progress is tracked through high-level reporting, with “no consequences for stalled implementation”.

Even the rhetoric around centering lived experience rings hollow. Despite repeated references to embedding the voices of consumers and carers, the Commission found little evidence that the current Agreement meaningfully involves them.

Federal Health Minister Mark Butler acknowledged the systemic shortcomings. At the recent Health Ministers Meeting in Melbourne, state and territory leaders agreed that workforce shortages, youth mental health, and interstate data sharing must become central to the new agreement.

“To see real progress, governments must collaborate effectively under a shared strategy. A new national agreement that learns from the mistakes of the current agreement is the best way forward,” said Commissioner Jackson.

The Commission has recommended extending the flawed National Mental Health and Suicide Prevention Agreement until 2027, not because it’s working, but to allow time to get the next version right. Crucially, it insists the new agreement must be co-designed with the people it claims to serve, not dictated to them.

“Our consultation shows that people involved in the system know what needs to change. The new Agreement needs to be delivered with them not just for them. We need to extend the Agreement to provide enough time for the next Agreement to be genuinely co-designed,” said Commissioner Button.

“To fulfil its purpose, the next agreement needs focused objectives and tangible commitments to achieve them. It must make governments accountable for delivering specific and measurable outcomes.”

The PC is now calling for public submissions to inform its final report, which will be handed to government on 17 October 2025.

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