The recent NSW Budget Estimates hearings offered an opportunity to track progress one year on since the NSW Government responded to the Parliamentary Inquiry, supporting 24 of the Inquiry’s 39 recommendations.

Across separate hearings, Minister Rose Jackson (Mental Health), Minister Kate Washington (Families, Communities and Disability Inclusion) and Minister Ryan Park (Health and Regional Health), outlined reform progress but acknowledged the delays, funding constraints and workforce challenges that continue to impact mental health services.

In the NSW Budget Estimates, NSW Government Ministers are subject to a key accountability process where each are questioned by Members of Parliament on their portfolios, funding decisions, and service delivery. The hearings provide transparency around public spending and offer insight into government priorities.

Here are the key takeaways and noted progress on key recommendations from the Inquiry report.

Community mental health

Recommendation 27 and 28

Mental Health Coordinating Council has strongly advocated for Community Living Supports (CLS). Evaluations show CLS produces $86,000 net savings per person over five years. Minister Jackson acknowledged CLS is cost-effective and reduces hospitalisations, however expansion is limited due to budget pressures and lack of a multi-year Commonwealth funding agreement.

The Pathways to Community Living Initiative (PCLI) Stage 1 is being prioritised with two sites identified: Hunter New England Local Health District and Northern Sydney Local Health District. Stage 2 expansion not guaranteed but not ruled out at this stage.

No current budget allocation for expansion of Step-Up Step-Down Services such as the Prevention and Recovery Centre, however Mental Health Coordinating Council will continue to advocate strongly for these evidence-based community supports that have demonstrated to be both effective and cost-saving.

Foundational Supports and NDIS

Recommendation 7 and 8

In the hearing with Minister for Disability, the Hon. Kate Washington, it was disappointingly noted that NSW has not specifically agreed to implement foundational supports, only to co-design with the Commonwealth under a “better off overall” test. Concerns remain that people are either having their NDIS plans reduced; being exited from the NDIS without state-based alternatives in place; or unable to access NDIS at all, particularly for those outside the 0–9 age cohort.

Minister Ryan Park noted potential rollout considerations tied to broader reform timelines and interagency coordination. There is an emphasis on embedding foundational funding within a sustainable finance model to support emergency department diversification, early intervention, and community-based services. While not always explicit, the discussion pointed to evaluating the effectiveness of foundational supports through funding governance and service delivery outcomes, particularly in mental health, emergency care pathways, and disability services.

Virtual care and access

Recommendation 4

Recommendation 4 on the accessibility of information and service directories was supported by the NSW Government in its response last year. The Government noted NSW Health’s Mental Health Single Front Door program (now known as the ConnectMH program) which aims to streamline triage and referral across services. Implementation on this has been delayed with it expected to go live in early to mid-2026 for seven districts.

Peer workforce

Recommendation 18

The statewide NSW Health Peer Workforce Framework has been finalised and is set to be launched soon – noting this is separate to the Mental Health Commission of NSW’s statewide peer workforce roadmap.

Peer workforce recruitment is nearing target with 239.6 FTE out of 255.3 positions filled.

Police as first responders’ reform

Recommendation 31, 33, and 34

The Inquiry Report took particular note of the urgent need for a health-led crisis response, and Chair of the Budget Estimates hearing and the Committee that oversaw the Inquiry and Report, Dr Amanda Cohn noted there is broad consensus that police should not be first responders to mental health emergencies. Minister Jackson reaffirmed commitment to a health-led response model but acknowledged delays in implementation. A whole-of-government framework has now been agreed upon, with a six-month consultation process underway involving consumers, families, clinicians and unions.

Existing models like PACER (Police, Ambulance, Clinical, Early, Response) and MHAA (Mental Health Acute Assessment Team) were well regarded but not yet expanded statewide due to the need for a unified model. It was also noted that staffing shortages have left the PACER program in Lismore inactive, highlighting ongoing workforce pressures.

Data and workforce planning

Recommendation 16

The NSW Government supported Recommendation 16 of the Inquiry Report:

That the NSW Government explore, with the Australian Institute of Health and Welfare, the provision of any information necessary for the timely publication of data on mental health services at a national, State and Territory level, to help coordinate and develop the national mental health workforce.

NSW Health is currently working with the Australian Institute of Health and Welfare on data integration and sharing of mental health data with community-managed organisations.

Trauma-informed care

Recommendation 9 (supported in principle)

The Inquiry made recommendations for the NSW Government to consider establishing a centre of excellence for research, training, clinical supervision and support, to deliver specific evidence-based therapies in trauma-informed care.

NSW Health is using the Agency for Clinical Innovation’s Trauma-informed Care in Mental Health Services Across NSW: A Framework for Change and the Trauma-Informed Mental Health Care Organisational Self-Assessment Tool, with the evaluation status to be confirmed.

Governance and strategy

The Budget Estimates also heard from the Mental Health Commission of NSW and their note on cultural reform being progressed internally following recent workplace issues.

The Commission is currently undertaking a new whole-of-government approach in the development of the next 10-year NSW Mental Health and Wellbeing Strategy.

Suicide Prevention Legislation is currently awaiting passage in the Legislative Assembly. The Mental Health Commission of NSW is preparing to lead the administration of that legislation should it pass.

Workers Compensation reforms

Minister Ryan Park’s hearing highlighted psychological injury and workers’ compensation claims as a growing pressure point, with impacts on processing pipelines, service delivery and workforce capacity. The management and assessment of claims were linked to broader mental health care pathways, underscoring the need for better integration with emergency department diversions and community-based services. Claim requirements for psychological injuries were noted to create ripple effects across clinical and administrative workloads, affecting staffing levels, specialist availability, and timely access to care.

Psychiatrists

A number of staff specialist psychiatrists who resigned in protest during the NSW public psychiatrist resignations earlier this year, are now seeking to return to the workforce. Re-employment pathways vary depending on the district, but Minister Jackson noted it is preferred these roles are filled with permanent staff specialist rather than continue to rely on VMOs (Visiting Medical Officers) and locums.

Since the start of the contingency program, 195 locums have been recruited, with 81 currently engaged – equivalent to around 60 FTE – costing $16 million. An additional $3 million has been spent accommodating public mental health patients in private hospitals.

Virtual psychiatry hubs, introduced as a temporary measure, are now considered permanent, though questions remain about their effectiveness without local knowledge.

One year on from the NSW Government’s response to the Inquiry and signs of progress can be seen on several supported recommendations, particularly the Peer Workforce Framework for NSW Health staff. Many reforms remain in early stages or have been delayed, and we will continue to track progress and advocate for timely action to ensure the Inquiry’s recommendations translate into meaningful improvements for people, families and communities across NSW.