Rethinking system stewardship in Australia’s mental health system

By design, Australia's mental health system is fragmented

For decades, Australia’s mental health system has been shaped by well-meaning reforms that prioritised decentralisation, flexibility, and consumer choice. However, these decisions have inadvertently created a fragmented ecosystem, leaving consumers, carers, providers, and policymakers to navigate a mental health system plagued by inefficiencies and disjointed care pathways.

The result is a mental health system where accountability is diffuse, risk is pushed to those least equipped to bear it, and the promise of seamless, person-centred care remains unfulfilled.

At this critical juncture, we must ask:

Who is ultimately responsible for the coherence of this system?
Are current commissioning and risk allocation models fit for purpose?
If not, what governance paradigm can drive the transformation of Australia's mental health system required to deliver on the promise of equitable, accessible, and integrated mental health care?

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KPMG's report explores why challenging conventional assumptions about risk and accountability as well as introducing bold strategies could help to redesign Australia’s mental health system for the future.

Rethinking system stewardship in Australia’s mental health system

Australia’s mental health system requires active stewardship to develop a smarter, more efficient system design. Find out why.

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Creating an integrated consumer experience in mental health

The burden of navigating our complex mental health system currently disproportionately falls onto consumers, families and carers. Individuals are expected to work their way around multiple disconnected services, re-tell their stories, and coordinate their own care, where the system itself should be designed around ease of access, relational continuity, and early engagement.

While Australia has made significant progress in recognising and responding to mental health needs, there is still a long way to go. Our mental health system requires resdesign to connect systems that recognise how people move through mental health care across services, settings, and life transitions. A consumer-first approach in mental health requires both structural reform and investment in navigation infrastructure so people can get help before crisis, not just after.

Key reforms to integrate mental health services to provide a cohesive customer experience could include:

embedding integration between health and social services into the system architecture
developing a unified national digital navigation framework
embedding consumer-first design principles into commissioning and funding decisions
designing models of guided access, such as care coordinators, central intake hubs, or AI-assisted triage systems.

Governments to lead mental health system reforms

Without reform, the burden of navigating Australia's complicated mental health system will continue to fall on frontline services and individuals seeking help. Governments have the ability to reclaim responsibility and build a system that is integrated, accountable, and designed around the people it serves.

What’s needed is a deliberate pivot from passive contract management to active system stewardship. As system artchitects, Governments could implement a clear mandate to design for coherence and enforce integration to that all parts of the mental health system work together as a unified whole.

Key questions for Goverments to consider include:

Who is ultimately responsible for system coherence?
Should Commonwealth and State governments impose stricter mandates on integration?
How do we ensure commissioning prevents fragmentation rather than reinforcing it?
Can risk-sharing be built into contracts rather than assumed?

How mental health services are commissioned needs reform

The failures of Australia's mental stem from poor system design, entrenched fragmentation, and an approach to funding and governance that reinforces silos rather than breaking them down. To build a functional, integrated, and consumer-centred mental health system, structural reform is required.

A new commissioning model should aim to:

align funding with population demand and system goals
incentivise collaboration over competition
embed enforceable expectations for coordination.

Until governments rethink how they fund mental health services, there is no guarantee that money will drive real system improvements, not just service activity.

And while funding remains activity-based rather than outcome-driven, the system will continue to prioritise contract compliance over consumer experience.