National mental health report 2013

State and territory government expenditure

Page last updated: 2013

The commitment by state and territory governments to some form of budget protection was part of the original National Mental Health Policy and has since been reinforced at various points through the Strategy. The commitment was intended to serve three purposes. Firstly, the Australian Government required a guarantee that the benefits of additional funds provided under the National Mental Health Strategy would not be negated by a reduction in state and territory funding for mental health. Secondly, there was recognition that existing service levels in Australia were struggling to meet even the highest priority needs and could not be further reduced without serious consequences. Thirdly, the commitment safeguarded against erosion of resources that was believed to be occurring with the downsizing of state- and territory-managed psychiatric hospitals and the incorporation of mental health services into mainstream health care.

The original National Mental Health Report, released in 1994, established the baseline for measuring change in state and territory mental health resources and documented the gross recurrent expenditure by each jurisdiction in 1992-93. The current report compares ongoing expenditure against this baseline, using the same approach that has been taken in the intervening reports. This approach describes what was spent by a particular state or territory, as opposed to what was spent within it, by deducting specific Australian Government payments from the total spending reported by each state and territory. This reduces the impact of growth in state and territory expenditure caused by mental health specific grants made by the Australian Government under the former Health Care Agreements and more current mental health specific Commonwealth-State funding agreements and payments provided by the Department of Veterans' Affairs for the mental health care of veterans by state and territory services. The intent of this approach is to focus on health funding that is under the discretionary control of state and territory governments - that is, funding that may or may not be spent on mental health.

Table 2 shows the summary picture of expenditure by state and territory governments, comparing baseline spending in 1992-93 with spending at the close of the first three National Mental Health Plans and the mid-point of the Fourth National Mental Health Plan.

All state and territory governments have met their commitment to maintaining mental health spending over the period 1992-93 to 2010-11. Spending growth increased by 145% overall, averaging 8% per year. With the exception of Victoria, all jurisdictions more than doubled
their expenditure during the period.

Table 2: Recurrent expenditure on mental health services by state and territory governments, 1992-93 to 2010-11 ($millions)a

1992-93 (Baseline year)1997-98 (End 1st plan)2002-03 (End 2nd plan)2007-08 (End 3rd plan)2010-11 (Mid 4th plan)Change since 1992-93Average annual growth
NSW
$564
$653
$867
$1,085
$1,303
131%
7%
Vic
$496
$534
$673
$857
$974
96%
5%
Qld
$253
$361
$454
$681
$830
228%
13%
WA
$164
$244
$305
$434
$523
219%
12%
SA
$150
$184
$205
$295
$327
118%
7%
Tas
$47
$54
$59
$98
$116
149%
8%
ACT
$23
$28
$45
$63
$72
208%
12%
NT
$14
$20
$22
$36
$43
211%
12%
Total
$1,710
$2,168
$2,630
$3,550
$4,188
145%
8%

a Excludes Australian Government dedicated mental health funding to states and territories but includes revenue from other sources (including patient fees and reimbursement by third party compensation insurers) and non-specific Australian Government funding provided under the Australian Health Care Agreement base grants/National Healthcare Agreement specific purpose payments.