Mental health underfunded in Aust: OECD

An OECD report has slammed Australia's approach to mental illness, criticising a lack of public spending and fragmented policies.

The Mental Health and Work report released on Monday says Australia lags behind other OECD countries when it comes to the employment gap between those with mental illness and those without.

Mentally-ill people are three times more likely to be unemployed and those with jobs struggle with sick leave and underperformance at work.

The medical and non-medical costs of mental illness in Australia amount to almost $29 billion each year, the report says, with indirect costs such as sick days nearly doubling that number.

The report blames fragmented policies and lack of continuity in government funding for the lack of improvement.

"Promising initiatives tend to be short-lived and overall public spending falls short of actual needs," the report says.

It says new funding is typically budget-neutral, meaning existing measures are dropped or cut back in return.

New funding also tends to reflect the thinking of the government of the day without contributing to structural change.

The report recommends integration of employment and health services, a national support structure for mentally-ill young people to transition from school to work and investing in services for mentally-ill jobseekers.

"There is a clear need for proper understanding among health care providers of the interplay between mental health and work and of how to support people with mental health problems so that they can remain in work."

Health Minister Sussan Ley has defended the decision not to pump new money into mental health as part of the federal government's shake-up of the ailing system, unveiled in November.

She says the government needs to get the framework right before adding more money - a position backed by mental health experts and groups.