Overview of the Mental Health Levy
Queensland’s mental health levy, which has generated $1.2 billion since its introduction in early 2023, has been criticized for being directionless and poorly managed, according to a review by the state’s auditor-general. The levy was established as a parliamentary recommendation to create a dedicated funding stream for mental health, alcohol, and other drugs (MHAOD) services. It is collected through payroll taxes and is projected to raise more than half a billion dollars above initial estimates in its first five years.
Despite the significant amount of money raised, the Queensland Audit Office found several shortcomings in how the levy is managed. There are concerns that millions of taxpayer dollars may be allocated to services without evidence of their effectiveness in achieving intended outcomes. This has raised fears that the funds are not being used optimally.
Governance and Management Issues
The audit highlighted a lack of appropriate governance structures and systems to manage the funds when the levy was introduced three years ago. According to Queensland’s Auditor-General, Rachel Vagg, this failure includes not defining the scope of the levy’s use, its outcomes, and responsibilities. As a result, decisions about how funding is allocated across the MHAOD system are poorly planned, and there is no system in place to monitor how money is spent or whether it is achieving any intended purpose.
Vagg noted that while both the Queensland Treasury and the Department of Health have designed processes and systems aligned with their respective responsibilities for managing the levy, there are opportunities for improvement in how they govern and oversee the funding.
Funding Allocation and Challenges
The government has been making decisions to allocate funding in response to requests from entities rather than adopting a coordinated planning approach. In some cases, levy funding has been used to replace existing funding sources for certain initiatives. To date, over 90% of the revenue collected through the levy has been allocated to Queensland’s health department, which used the funds to implement its Better Care Together plan. Revenue has also been provided to other government entities, such as the Queensland Reconstruction Authority for disaster recovery programs and the Department of Justice for a domestic and family violence-related initiative.
Government Response and Next Steps
Queensland Health Minister Tim Nicholls expressed disappointment with the audit findings and criticized the former Labor government for failing to establish governance arrangements when the levy was introduced. He stated that upon coming into government, he had concerns about the management and oversight of Queensland Health’s Mental Health Levy investment through Better Care Together and requested the department undertake a midterm review.
According to Nicholls, the review found that the levy was used to fund programs out of scope, and several initiatives were not properly funded. Paul Williams from Queensland’s Treasury mentioned that the department has started work on drafting guidelines to clarify the scope of activities to be funded by the levy and the processes for applying for funding.
Queensland’s Mental Health Commissioner, Ivan Frkovic, agreed with all recommendations outlined in the report and stated that the commission would work collaboratively with the government to support their implementation.
