NSW government criticised for hidden $120m funding cut to critical mental health program

Angry mental health activists have targeted the New South Wales government for destroying a program designed to support some of the health system’s most vulnerable patients.

A $111.8 million pre-funding announcement Tuesday included a four-year $40 million funding commitment for the Pathways to Community Living Initiative (PCLI).

However, that was significantly less than the $160 million over four years for which the program was originally advertised in December 2021.

The revised amount means the initiative, which supports long-term patients with complex mental health problems, can now only provide 20 places instead of the planned 230 that the programme could have supported.

Providers currently negotiating with the government were surprised by an email from NSW Health on Tuesday confirming the cuts. The department said it was now undertaking a detailed planning process to reduce the scope and cost of the program.

Lawrence Muskitta, director of government relations at the Black Dog Institute, said it was “abhorrent” that the government would cut a program “at a time like this when the need is so great.”

“Independent evaluations of this program have shown that it reduces hospital admissions and interactions with police. It helps keep people healthy and enables them to live in the community,” he said.

“People with very severe mental health issues and long-term mental health issues often have a very hard time maintaining stable housing and staying in treatment. So this program could really prevent so many people in the community from going to hospital or jail.”

The executive director of the Mental Health Co-Ordinating Council, Evelyne Tadros, accused the government of “watering down” the program, which would ultimately cost the government more money.

“Not only is it a human rights issue, it also costs more to treat patients in hospital rather than letting them live in the community with choices and autonomy,” says Dr. Tadros.

New South Wales Mental Health Minister Rose Jackson said the $40 million paid out to PCLI on Tuesday was new funding that would enable the program to continue.

It is believed that the $160 million originally proposed required additional contracts with providers to enable the program to serve all 230 customers, but talks have been unsuccessful.

“This investment will enable us to fund the ongoing provision of 25 staff across the NSW mental health system dedicated exclusively to working with people with chronic mental illness and complex needs,” she said.

“Without this solution, these workers are currently employed but face a funding bottleneck.”

But Ms Jackson said “more needs to be done”.

“This is a significant investment and a milestone for us to build on,” she said.

“I am committed to continuing to work with experts in this field on long-term interventions.”

The dispute over funding coincided with the conclusion of a parliamentary inquiry into access to mental health care, which described the current situation in NSW as “chronic and severely underfunded”.

The final report also calls for immediate and “significant” reforms to close access gaps, including increased funding for doctors, health professionals and services.

Committee chair and Green Party health spokeswoman Amanda Cohn said the funding cuts were an “insult to all the people who sacrificed their time and energy to participate in the investigation.”

“The cut to PCLI is particularly troubling. The inquiry had recommended increasing funding for assisted living programs, including PCLI. However, the funding announced today is less than previously promised.”

On Tuesday, Prime Minister Chris Minns said he had yet to review the report and its 39 recommendations.

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