National mental health report 2013

Australian Government expenditure

Page last updated: 2013

The Australian Government's spending on mental health increased from $701 million in 1992-93 (28% of national mental health spending) to $2.4 billion in 2010-11 (35% of national spending). This increased share was due to a combination of growth in new activities and programs and increases in existing services. Figure 7 shows that in the early years of the National Mental Health Strategy, the main driver of growth was expenditure on psychiatric medicines subsidised through the Pharmaceutical Benefits Scheme (PBS). Increased spending on subsidised pharmaceuticals accounted for 49% of the growth in Australian Government expenditure under the First National Mental Health Plan and 82% under the Second National Mental Health Plan. The impact of psychiatric medicines on Australian Government mental health spending reduced markedly under the Third and Fourth National Mental Health Plans, dropping to 26% in both of these periods. This was due to a combination of factors, including the fact that several commonly prescribed antidepressants came off patent during this time, allowing new generic products into the Australian market. The costs of these products fell below the PBS subsidy threshold, or required significantly less Australian Government subsidisation than the patented products. Additionally new programs funded under the COAG National Action Plan began to be rolled out between 2006 and 2008, including the introduction of new Medicare-funded 'talking therapies' provided by psychologists and other allied health professionals. Each of these factors moderated the previous role of the PBS as the main driver of Australian Government mental health spending.

Figure 7: Drivers of growth in expenditure on mental health by the Australian Government under the National Mental Health Plans, 1992-93 to 2010-11

Refer to the following table for a text equivalent of Figure 7: Drivers of growth in expenditure on mental health by the Australian Government under the National Mental Health Plans, 1992-93  to 2010-11

Text version of figure 7

1993-94 to 1997-98 (1st plan)1998-99 to 2002-03 (2nd plan)2003-04 to 2007-08 (3rd plan)2008-09 to 2010-11 (4th plan, 3 years only)
Pharmaceutical Benefits Scheme
49%
82%
26%
26%
Medicare Benefits Schedule
8%
-16%
16%
67%
Other Commonwealth programs and activities
43%
34%
58%
7%