Opinion: It’s time to fix community mental health funding

The Mercury, Talking Point

Securing a long-term workforce as well as sustainable and consistent funding is key to an efficient care system, writes Dan Vautin

Across the state, community‑managed mental health services support thousands of Tasmanians to be and stay well. They help people stay connected to family, work and education. They provide practical help early so people can avoid preventable hospital presentations. When these supports are stable and available, people thrive.

Community mental health services are mostly local, not-for‑profit organisations that deliver a mix of mental health and wellbeing programs, clinical support, and psychosocial supports for people living with mental illness who need practical, everyday assistance to stay well.

Psychosocial supports can include help with daily routines, rebuilding and maintaining social connections, developing confidence and social skills, and staying engaged in study or work. These services are the backbone of prevention and early intervention in Tasmania.

But the support people rely on is becoming increasingly fragile.

A recent Mental Health Council of Tasmania survey revealed that more than 130 staff have contracts set to expire on 30 June. Over 90 percent identified funding insecurity as the leading challenge for a sustainable workforce. These figures are alarming, especially given this is only a small sample of the sector. And more concerningly, it isn’t a one‑off. With single‑year contracts common, this uncertainty has become an annual reality.

The yearly contract merry-go‑round doesn’t just affect staff. It directly impacts the people who rely on these services. When staff don’t know if they’ll have a job come July, people can’t be sure the supports they depend on will continue. When services pause, shrink or wind down, people often become increasingly unwell until hospital becomes the only option.

When skilled staff leave because their roles aren’t secure, Tasmania loses workforce capacity we can’t easily replace. When organisations can’t plan beyond a year, programs remain fragile, reactive and more expensive than they need to be. It is exhausting, avoidable and undermines the outcomes we are all working hard to achieve.

Our survey found that 64 percent of organisations had already lost staff or applicants due to insecure roles. One organisation estimated that turnover caused by funding uncertainty was costing them the equivalent of one full‑time role every year. That’s not inefficiency – community organisations already operate more efficiently than most commercial operations. It is a structural cost imposed by the current funding model.

Contract length is only part of the issue. Many organisations are also struggling with indexation that has not kept pace with real cost increases. Insurance, leases, utilities and wages have all risen significantly. When indexation falls short of actual costs, the math is simple: the same funding buys less support.

Every year, one in five adults and nearly two in five young people experience mental ill‑health. If we want to bring those numbers down, the supports that keep people well – and prevent hospitalisation – must be funded in a stable and sustainable way.

We now have two major opportunities to fix this.

Firstly, governments are preparing their 2026–27 budgets. This is the moment to transition community mental health organisations to five‑year agreements with adequate indexation and proper renewal lead times.

Secondly, negotiations are underway for the next National Mental Health and Suicide Prevention Agreement. This is our chance to align investment so psychosocial supports are funded sustainably and delivered consistently, no matter where someone lives.

The case for change is clear. The 2020 Productivity Commission found that underfunding psychosocial supports costs Australia billions each year through avoidable acute care, lost productivity and added pressure on housing and justice systems. A 2024 Commonwealth‑commissioned report estimated that in Tasmania alone, more than 10,000 people are missing out on the psychosocial supports they need. Nationally, it’s close to half a million.

Properly funding the organisations that provide these supports isn’t just the right thing to do – it’s the sensible, cost‑effective thing to do, especially in a tight economic environment where governments are looking to wring value from every dollar.

Tasmania now has an opportunity to build a mental health system that is stable, sustainable and genuinely preventative. Long‑term contracts with realistic indexation and renewal periods won’t solve everything, but they will give community mental health services the footing they need to deliver the outcomes we all want.

From a system perspective, prevention and early intervention are still overshadowed by acute care. Hospitals are essential, but they shouldn’t be the centrepiece. Our measure of success should be how many people we help stay well in their communities and out of hospital – not how many we can fit into them.