Psychiatrists in Victoria say today’s State Budget delivers important continuity for mental health services, but overall investment appears to be levelling off — and the pace of reform is slowing just when it needs to accelerate. 

Chair of the RANZCP Victorian Branch, Associate Professor Simon Stafrace, welcomed continued support in the 2025–26 State Budget for clinical services, workforce programs, and early intervention. But he warned they fell short of delivering the scale of transformation required. 

“Psychiatrists are pleased to see the Allan Government continue funding for key mental health programs, including those for training psychiatrists and other mental health workers that were at risk of lapsing,” said A/Prof Stafrace. 

“This shows a genuine commitment to building a skilled workforce pipeline and improving access to care.” 

“However, critical components of the Royal Commission’s reform agenda — including rehabilitation, housing, trauma-informed care, and accessible community services — remain underfunded or absent.” 

The Branch welcomed the following budget announcements:

• $47 million to support Victoria’s mental health workforce and training pipeline — including graduate programs such as psychiatry
• $23 million to establish seven new Mental Health and Wellbeing Locals, and $6 million to sustain the existing network
• $289 million to operate 82 inpatient mental health beds and 29 alcohol and other drug or emergency department hub beds across six health services
• $12 million for Hospital in the Home beds, delivering acute care in community settings
• $25 million for suicide prevention initiatives
• $19 million for mental health support for LGBTIQA+ Victorians, including trans and gender diverse young people
• $35 million for youth mental health services, including the new Parkville Youth Mental Health and Wellbeing Service in partnership with Orygen.

“These investments will benefit many Victorians and confirm that mental health remains a policy priority. But this is no time for complacency,” said A/Prof Stafrace. 

“More than 500,000 Victorians live with severe and moderately severe mental illness. They need access to the full spectrum of care — not just acute beds, but rehabilitation, supported housing, and long-term recovery services. Many of those pieces are still missing.” 

The Branch highlighted several areas where gaps remain:

• No new funding for rehabilitation services or supported housing for people with severe mental illness.
• Incomplete rollout of Mental Health and Wellbeing Locals.
• Minimal attention to community-based alternatives to emergency departments and to options for trauma-informed care.
• Lack of a statewide clinical strategy and limited investment in research and evaluation infrastructure.

“Since 2018, over $6 billion has been invested in the mental health system — real progress has been made. 

“Reform was never meant to be a one-off — but with rising demand, escalating costs, and critical parts of the mental health reform blueprint still sitting on the shelf, we risk sliding back into a crisis-driven system: reactive, overstretched, and unable to deliver the right care in the right place at the right time.” 

The RANZCP Victorian Branch will continue working with government to ensure reform remains focused on building a compassionate, equitable, and evidence-based mental health system for all Victorians. 

ENQUIRIES: For more information, or to arrange an interview call Dishi Gahlowt on +61 437 315 911 or email media@ranzcp.org.  

The Royal Australian and New Zealand College of Psychiatrists is a membership organisation that prepares medical specialists in the field of psychiatry, supports and enhances clinical practice, advocates for people affected by mental illness and advises governments and other groups on mental health care. For information about our work, our members or our history, visit www.ranzcp.org. 

In Australia: If you or someone you know needs help, contact Lifeline on 13 11 14 or www.lifeline.org.au or the Suicide Callback Service on 1300 659 467 or www.suicidecallbackservice.org.au. 

In New Zealand: If you or someone you know needs help, contact Lifeline NZ on 0800 543 354 or www.lifeline.org.nz or the Suicide Crisis Helpline on 0508 828 865 or www.lifeline.org.nz/suicide-prevention.