The Mental Health Levy Remains in Place Despite Concerns
The state government has confirmed that a $1.2 billion mental health levy will not be scrapped, despite a critical report highlighting concerns about its management. The decision comes after an analysis by the Queensland Audit Office revealed shortcomings in how the levy was being handled, raising questions about whether taxpayer funds were being effectively used to achieve the intended outcomes.
The levy, which was introduced as a parliamentary recommendation to create a dedicated funding stream for mental health, alcohol, and other drugs (MHAOD) services, is collected through payroll taxes. It was launched in early 2023 and has already generated $1.2 billion between January 2023 and June 2025. The government now expects it to raise more than half a billion dollars above the original projections in its first five years.
Health Minister Nicholls emphasized that the levy would remain in place, stating, “Absolutely, the mental health levy will stay, and the Crisafulli government will ensure that the mental health levy delivers mental health services.” He reiterated his support for the levy, noting the growing demand for mental health services and the community’s concern over access to care.
However, the audit found that there was no clear evidence of whether the intended outcomes were being achieved. This lack of accountability was attributed to the absence of proper governance structures and systems, according to Queensland’s Auditor-General Rachel Vagg.
Nicholls acknowledged the need for improvements and said the department was working with treasury to address these issues. While he could not confirm when changes would be implemented, he stated that the focus was on ensuring the money was spent effectively.
“I think what this report shows is that the mental health levy has been used to deliver outputs, rather than outcomes,” Nicholls said. “Yes, there are now more people employed, but are those employed people actually delivering better mental health outcomes?”
In response to the findings, the government has taken steps to ensure funding is directed to the right services. Nicholls mentioned that $350 million had been allocated to services clearly within the scope of the mental health levy. He argued that this approach would benefit Queenslanders by providing targeted support.
When asked about potential changes to the tax threshold, Nicholls deferred to the treasurer, stating, “What I can say to you is that the mental health levy, the money that’s granted to us by the people of Queensland, will be used in terms of delivering mental health services.”
He also clarified that the current levy rate remains at 0.5 per cent, applied to payrolls exceeding $10 million. “There will be no cut to the mental health levy,” he said.
Key Points from the Statement
- The mental health levy remains in place despite concerns raised by an audit.
- The levy has generated $1.2 billion since its introduction in 2023.
- There is a lack of evidence on whether the funds are achieving the intended mental health outcomes.
- The government is working on improving governance and accountability measures.
- $350 million has been allocated to services directly related to the levy.
- The levy rate remains at 0.5 per cent for payrolls above $10 million.
- No changes to the levy are planned at this time.
As the debate continues, the focus remains on ensuring that the mental health levy is used effectively to improve the well-being of Queenslanders.
