Source : the age
A $1.2 billion levy that was designed to significantly improve Victoria’s problem-plagued mental health system has resulted in only a small overall funding increase, frustrating advocates and experts who say it is not working as the royal commission intended.
A report from the Mental Health and Wellbeing Commission, the independent authority that holds the state government to account, shows that while spending on mental health had increased from about $2 billion in 2020 to $3 billion in 2025-26, that was only $200 million more than what the government would have invested had it continued spending at the pre-royal commission rate.
“In comparison to increases seen in that previous period, therefore, the additional investment enabled by the introduction of the levy, is considerably less than the revenue raised,” the report said.
The state opposition is now promising a full audit of how the levy – which was implemented in 2022 as a result of Victoria’s nation-leading royal commission – has been spent should it win November’s election.
The state government introduced the levy on top of payroll taxes after the royal commission recommended it be designed to deliver a “substantial increase” to services and support the “current and future expected growth of the state’s existing funding commitments”.
Mental health advocates and experts said the levy, which is expected to raise $1.2 billion this financial year, was meant to be additive to government funding and not offset Labor’s slowing general revenue spend on mental health.
Monash University Emeritus Professor David Copolov said the government had not delivered a substantial overall funding increase as promised, and that Labor’s reduced rate of non-levy funding had resulted in a shortfall of hundreds of millions of dollars.
“The levy seems to have allowed the government to slow the acceleration in mental health funding, just when major reforms required sustained and substantially increased investment,” Copolov said.
He added: “The Victorian government really needs to reprioritise spending on mental health. Progress is nowhere near where the royal commission had envisaged it would be by this time.”
Philippa Thomas, the chief executive of peak body Mental Health Victoria, said it was “absolutely clear that [funding] is not meeting what the royal commission intended”, and that the levy was designed to add to increasing spending, not compensate for when it was pared back.
“The mental health sector and the Victorian community rightly expect that every dollar generated by the levy is invested in the system as it was intended, as an addition to continued year-on-year growth to meet demand,” Thomas said.
Thomas said a lack of transparency from the government around the funding was unhelpful and risked eroding trust.
“It is unnecessarily harmful to people affected by mental illness – as an individual, or as a family member or carer – to be confronted with questions about whether or not more could have been done,” she said.
“There are people behind the politics, and I would welcome this issue being clarified, and the focus returning to what more can be done to support the mental health system and the Victorians who need it.”
Thomas said Mental Health Victoria was calling on all political parties to commit their support to the levy and its use “as was intended by the commission, as well as sufficient transparency and accountability measures that give Victorians the confidence they are owed”.
Opposition mental health spokeswoman Emma Kealy said the state government had failed to spend the levy as promised.
“Labor refuses to provide transparency or accountability for where the levy money has gone, while every key indicator shows Victoria’s mental health system is performing far worse than it was a decade ago,” Kealy said. “The Liberals and Nationals have a plan to get mental health reform back on track, and that will begin with a full audit on where the levy has been spent.”
The government maintains the levy has and will continue to be dedicated solely to mental health services spending. A spokesperson said no jurisdiction in the country was doing as much as Victoria to reform the mental health system.
“Since its introduction in 2022, the Mental Health and Wellbeing Levy has helped drive a significant increase in investment in Victoria’s mental health system and will continue to supplement government funding,” the spokesperson said.
The Mental Health and Wellbeing Commission’s report came under scrutiny this week after this masthead revealed it had been significantly altered to remove remarks critical of the state government’s progress. When the report was made public, the original version’s authors had been removed from their positions and an interim commissioner, appointed by the mental health minister, oversaw the redrafting.
This masthead also uncovered accusations of violence, drug use and an exodus of senior staff from the state’s flagship youth mental health service, as workers said the sector was more broken now than it was before the royal commission.
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Angus Delaney is a state political reporter at The Age. Email him at angus.delaney@theage.com.au or contact him securely on Signal at angusdelaney.31Connect via email.
