The Productivity Commission Report on Mental Health – An analysis of key issues

The Productivity Commission Report on Mental Health – An analysis of key issues

July 29, 2021

The Productivity Commission Report on Mental health was released in December 2020.  i was asked by the Victorian Faculty of Forensic Psychiatry to give a Zoom presentation.  This is the result.  I initially called it ‘A Curate’s Egg – good in parts’, but as I became increasingly disenchanted I changed the name to ‘The Good, the Bad and the Ugly.’  Two examples:

Prevalence of Mental Illness

  • The Report’s preamble states:
  • Almost half of all Australians aged 16–85 years have had a mental illness at some point in their life and about one in five adults have experienced mental illness in a given year (ABS 2008).
  • Definitions in the Report
  • Mental illness or mental disorder is a health problem that significantly affects how a person feels, thinks, behaves and interacts with others. It is diagnosed according to standardised criteria.
  • Mental health problem refers to a combination of diminished cognitive, emotional, behavioural and social abilities, but not to the extent of meeting the criteria for a mental illness or disorder.

Later the Report states:

About 17% of people experienced an episode of mental illness over the past 12 months:

  • mild (9%)
  • moderate (5%)
  • severe (3%).  

It states that Mild conditions can be either self‑managed or managed within either primary care or community service settings.

Moderate conditions can require specialist support, including psychosocial support services and specialist mental healthcare.

Severe conditions  need hospital‑based care or treatment from specialist community mental health teams and a range of community services to support their recovery.

Roughly one third of people with a severe condition have a persistent disorder or complex needs.


  • Mild conditions comprise more than half this group, they do not meet their definition of mental illness.
  • Therefore only 8% in any one year have a mental illness and only 3% have an illness that is severe, of that group only 1% have a persistent disorder or complex needs!
  • The Report consistently conflates mental illness and mental health problems to the detriment of those with mental illness who need more care.

Cost of Bullying

  • Recent estimates undertaken by the Productivity Commission based on a prevalence rate of 9.4% – estimated cost of between $22 billion and $47.4 billion – midpoint $34.7 billion in 2018.
  • Costs to:
    • management
    • victims
    • the community
  • This assumes about 1.12Mn workers are not only bullied each year but have had reduced productivity/time off work because of bullying.
  • Cost per bullied worker is between $19,600 – $42,300/year.
  • However the number of serious workers compensation claims throughout Australia (serious meaning a week or more off work) has fluctuated between 6000 – 8000 for the past 15 years, of those about 30% are related to harassment/ bullying so between 1800 – 2400 claims/year are for bullying!
  • The average cost of a mental health claim is $25,650/person so bullying claims cost $48Mn – $61.5Mn/year
  • The figures do not correlate; $22Bn/year and $47.4Bn compared with $48Mn – $61.5Mn/year


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