ALP

001

 - Mental Health

Name of policy:

Mental Health

Person requesting costing (Prime Minister/Leader of the Opposition/Leader of a minority party):

Prime Minister

Date of public release of policy:

8 April 2025

Link to the publicly released policy:

Strengthening Medicare: Labor to deliver $1 billion for more free mental health services

Date of request to cost the policy:

17 April 2025

Summary of policy (please attach copies of relevant policy documents):

Element One
Delivering 22 new and 9 upgraded Medicare Mental Health Centres, progressively establishing them over 4 years from 2025-26.

Element Two
a) Delivering 4 new and 2 upgraded headspace centres.
b) Boosting service capacity at 30 existing headspace centres, creating the new headspace plus.
c) Create an additional 2 new remote headspace services and 20 headspace outreach locations in rural areas.
d) Funding for headspace plus evaluation ($1.5 million per year for three years from 2026-27).

Element Three
a) Establishing 20 youth specialist care centres (YSCC) to support young people requiring specialist clinical support, covering groups for whom the headspace service is not sufficient for, but hospital admission is not necessary. 8 existing headspace Early Psychosis Youth Services (EPYS) will be upgraded and rebranded, and an additional 12 Centres will be established.
b) Continuing to support the National Centre of Excellence in Youth Mental Health (2025-26: $3.6 million) and transforming it into the National Institute for Youth Mental Health ( 2026-27: $14.6 million, 2027-28: $14.9 million, 2028-29: $14.4 million) 

Element Four
a) Creating an extra 500 postgraduate psychology student places – evenly phased over three years from 2026-27.
b) Support 200 GPs and other medical professionals to undertake the Certificate of Postgraduate Training in Clinical Psychiatry – evenly phased over four years.
c) Extend funding for 30 psychiatry training places from July 2026 to December 2028
d) Piloting 10 new psychiatry training places tied to Medical Mental Health Centres over four years
e) Creating 500 peer workforce training places, providing $5,000 per student to not-for-profit organisations to facilitate a placement and support supervision costs in public mental health services – evenly phased over four years
f) Funding for Psychology Board of Australia approved supervisor training – evenly phased over three years from 2026-27 (300 sessions at $3,000 per session per year) with additional funding for administration ($0.3m in 26-27).

Intention of policy:

To provide new free mental health services that are better matched to the needs of each Australian, and to grow the workforce to ensure there is support available when people need it.

Certification that this, or a substantially similar costing request, has not been submitted to the Parliamentary Budget Office:

This, or a substantially similar costing request, has not been submitted to the Parliamentary Budget Office.

Is the policy part of a package? If yes, list and outline components and interactions with proposed or existing policies:

No.

Where relevant, is funding for the policy to be demand driven or a capped amount?

Capped.

Will third parties (for instance the States/Territories) have a role in funding or delivering the policy? If yes, is the Australian Government contribution capped, with additional costs to be met by third parties, or is another funding formula envisaged?

No.

Are there associated savings, offsets or expenses? If yes, please provide details:

No.

Does the policy relate to a previous budget measure? If yes, which measure?

Element Four(a) – 2023-24 Budget – “Mental Health”

If the proposal would change an existing measure, are savings expected from the departmental costs of implementing the program? Will funding/cost require indexation? If yes, list factors used: 

No.

What are the estimated costs each year? Are these provided on a cash or fiscal basis?

2025-26: $16.5 million

2026-27: $187.7 million

2027-28: $336.8 million

2028-29: $542 million

Cash basis.

Are the revenue and/or expense costs likely to be significantly different beyond the forward estimates period? If yes, why?

No.

What assumptions have been made in deriving the expected financial impact in the party costing?

Element One: unit costs for establishment and operation of Medicare Mental Health Centres based on Department of Health and Aged Care advice. New centres phased in with 5 established in 2025-26, 7 established in 2026-27, 7 established in 2027-28 and 3 established in 2028-29. Upgraded centres phased in with 3 centres upgraded in each of 2026-27, 2027-28 and 2028-29.
 

Element Two: unit costs for establishment and operation of headspaces based on Department of Health and Aged Care advice. 2 new headspace centres established in each of 2026-27 and 2027-28. 1 headspace upgrade in each of 2026-27 and 2027-28.10 headspace plus upgrades in each of 2026-27, 2027-28 and 2028-29. Remote headspaces established in 2026-27.
 

Element Three: unit costs for new youth specialist care centres based on Department of Health and Aged Care advice. 4 EPYS upgrades in 2026-27 and 2 each in 2027-28 and 2028-29. 12 YSCCs established in 2027-28.
 

Element Four: unit costs for elements based on Department of Health and Aged Care advice.

Has the policy been costed by a third party? If yes, can you provide a copy of this costing and its assumptions?

No.

What is the expected community impact of the policy? How many people or businesses will be affected by the policy? What is the likely take up? What is the basis for these impact assessments/assumptions?

Not applicable.

Who will administer the policy (for example, Australian Government entity, states and territories, non-government organisation, etc.)?

Department of Health and Aged Care

Should departmental expenses associated with this policy be included in this costing? If no, will the Australian Government Entity be expected to absorb expenses associated with this policy? If yes, please specify the key assumptions, including whether departmental costs are expected with respect to program management (by policy entities) and additional transactions/processing (by service delivery entities):

No, the Department of Health and Aged Care is expected to absorb departmental expenses.

Intended date of implementation:

2025-26 financial year

Are there transitional arrangements associated with policy implementation?

No

Will the policy be ongoing or terminating?

Elements 1, 2a, 2c, and 3a ongoing. Remaining elements are terminating.

If terminating, what is the intended date of termination? Are there any transitional arrangements associated with the conclusion of the policy?

Elements that terminate are intended to terminate 30 June 2029.

List major data sources utilised to develop policy (for example, ABS cat. no. 3201.0):

Not applicable

Are there any other assumptions that need to be considered?

No

* Ongoing policies continue indefinitely (until a decision is made to cease or alter the program). Terminating measures end on a date set out in the initial policy and a further decision is required to continue the program beyond this date.

PUBLIC RELEASE OF 2025 ELECTION COMMITMENT COSTING

Name of proposal costed:

Mental Health

Costing Identifier:

ALP001

Summary of costing:

The proposal is to provide $1.1 billion over four years from 2025-26 ($466.4 million per year ongoing from 2029-30) to provide new free mental health services and to grow the mental health workforce. The proposal includes the following four elements:

• Element 1 provides $246.9 million over four years from 2025-26 ($134.9 million per year ongoing from 2029-30) to fund 22 new and nine upgraded Medicare Mental Health Centres. 
• Element 2 provides $243.3 million over three years from 2026-27 ($30.0 million per year ongoing from 2029-30), comprising: 

a) $17.6 million over three years from 2026-27 ($8.5 million per year ongoing from 2029-30) to fund four new and two upgraded headspace centres.

b) $160.5 million over three years from 2026-27 to boost service capacity at 30 headspace plus centres.

c) $60.7 million over three years from 2026-27 ($21.5 million per year ongoing from 2029-30) to fund two new remote headspace services and 20 headspace outreach locations in rural areas.

d) $4.5 million over three years from 2026-27 for headspace plus evaluation.

• Element 3 provides $508.2 million over three years from 2026-27 ($301.5 million per year ongoing from 2029-30), comprising: 

a) $464.3 million over three years from 2026-27 ($301.5 million per year ongoing from 2029-30) to fund 20 youth specialist care centres to support young people requiring specialist clinical support.

b) $43.9 million over three years from 2026-27 to fund the National Institute for Youth Mental Health. 

• Element 4 provides $97.7 million over four years from 2025-26, comprising: 

a) $45.2 million over three years from 2026-27 to fund an extra 500 postgraduate psychology student placements each year.

b) $8.3 million over four years from 2025-26 to support 200 General Practitioners (GPs) and other medical professionals to undertake the Certificate of Postgraduate Training in Clinical Psychiatry (CPTCP) each year.

c) $21.1 million over three years from 2026-27 to extend funding for 30 psychiatry training places each year from July 2026 to December 2028.

d) $9.7 million over four years from 2025-26 to pilot 10 new psychiatry training places tied to Medicare Mental Health Centres each year.

e) $10.3 million over four years from 2025-26 to fund 500 peer workforce training places each year.

f) $3.1 million over three years from 2026-27 to fund 300 Psychology Board of Australia approved supervisor training sessions each year and funding for administration cost.

Ongoing or Terminating (including date)(a):

Elements 1, 2a, 2c and 3a ongoing. Remaining elements terminate on 30 June 2029. 

Person making the request:

Prime Minister

Date costing request received:

17 April 2025

Date of public release of policy:

8 April 2025

Date costing completed:

24 April 2025

Additional information requested (including date):

Not applicable

Additional information received (including date):

Not applicable

(a) Ongoing policies continue indefinitely (until a decision is made to cease or alter the program). Terminating measures end on a date set out in the initial policy and a further decision is required to continue the program beyond this date.

Financial implications (outturn prices)(b)

(b) A positive number for the fiscal balance indicates an increase in revenue or a decrease in expenses or net capital investment in accrual terms. A positive number for the UCB indicates an increase in revenue or a decrease in expenses or net capital investment in cash terms.

Where relevant, state that the proposal has been costed as a defined or specified amount:

Elements 2d, 3b and the administration cost in 4f were costed as specified amounts. 

Where relevant, include separate identification of revenue and expense components:

Not applicable

Where appropriate, include a range for the costing or sensitivity analysis:

Not applicable

Qualifications to the costing (including reasons for the costing not being comprehensive):

Not applicable

Where relevant, explain effects of departmental expenses:

As specified in the costing request, the Department of Health and Aged Care would absorb the associated departmental costs.

Where relevant, explain the reason for any significant differences between the assumptions specified in a party costing request and those used in a Treasury or Finance costing:

The costing includes indexation except for where the funding amount has been specified in the costing request.

Other comments (including reasons for significant differences between the estimated impact on the fiscal and underlying cash balances). Where relevant, include an explanation of the medium-term implications of the proposal.(c)

Elements 1, 2a, 2c and 3a have ongoing operational funding of $466.4 million per year from 2029-30.

(c) Information on the medium-term implications will be provided if the cost of the policy is expected to be significantly different beyond the forward estimates period. The medium term is considered to be the 7 years after the current forward estimates.

Background information

Costing methodology used:

• Costing techniques;
• Policy Parameters;
• Statistical data used.

Behavioural assumptions used (as appropriate): 

 

Element 1

This costing is based on Medicare Mental Health Centres being established and upgraded as follows. 

	2024-25	2025-26	2026-27	2027-28	2028-29
New centres	0	5	7	7	3
Upgraded centres	0	0	3	3	3

The costing assumes services would commence 12 months after establishment of a new centre and additional services 12 months after an upgrade of a centre. 

 Element 2

This costing is based on headspace centres being established and upgraded as follows. 

	2024-25	2025-26	2026-27	2027-28	2028-29
Element 2a: New centres	0	0	2	2	0
Element 2a: Upgraded centres	0	0	1	1	0
Element 2b: headspace plus	0	0	10	10	10
Element 2c: Remote services	0	0	2	0	0
Element 2c: Outreach locations	0	0	20	0	0

For Element 2d, the costing assumes a specified amount of funding of $1.5 million per year over three years from 2026-27. 

The costing assumes services would commence 12 months after establishment of a new centre and additional services 12 months after an upgrade of a centre. 

Element 3

For Element 3a, this costing is based on youth specialist care centres being rebranded, upgraded and established as follows. 

	2024-25	2025-26	2026-27	2027-28	2028-29
Rebranded and upgraded centres	0	0	4	2	2
New centres	0	0	0	12	0

For Element 3b, the funding for transforming the National Centre of Excellence in Youth Mental Health into the National Institute for Youth Mental Health is as specified in the costing request. Funding of $3.6 million in 2025-26 has been accounted for in the 2025 Pre-election Economic and Fiscal Outlook, therefore would not have an impact on the underlying cash balance. 

The costing assumes services would commence 12 months after establishment of a new centre and additional services 12 months after an upgrade of a centre. 

Element 4

This costing is based on the profile of each sub-element as follows. 

	2024-25	2025-26	2026-27	2027-28	2028-29
Element 4a: Postgraduate psychology student placements	0	0	500	500	500
Element 4b: CPTCP places	0	200	200	200	200
Element 4c: Psychiatric training places (continue)	0	0	30	30	30
Element 4d: Psychiatric training places (new)	0	10	10	10	10
Element 4e: Peer workforce training places	0	500	500	500	500
Element 4f: Supervisor training sessions	0	0	300	300	300

For Element 4f, the costing assumes a specified amount of funding of $0.3 million in 2026-27 for administration.  

Statistical data used.

This costing uses data published on the Australian Institute of Health and Welfare, Mental Health, Performance Indicators website: https://www.aihw.gov.au/mental-health/monitoring/performance-indicators…

Behavioural assumptions used (as appropriate): Not applicable