Mental health support will be preventative and proactive, the prime minister has vowed in response to a new report showing the cost of mental illness reaches $220 billion each year.
Scott Morrison says children and families are priorities for the refreshed approach.
"We will not wait for risk factors to eventuate or warning signs to escalate, but offer the right intervention and support as early as possible," he said in Melbourne on Monday.
"We will support Australians where they live, where they learn and where they work.
"There will be more front doors into support. If you knock we need someone to hear you and for someone to open that door and for someone to help."
The Productivity Commission's report into mental health conservatively estimates such illnesses to cost between $200 to $220 billion each year.
Prime Minister Scott Morrison addresses the media during a press conference at CSL Behring in Broadmeadows, Melbourne. Source: AAP
It amounts to just above one-tenth of Australia's entire economic production in 2019, or between $550 million and $600 million per day.
It says $17 billion worth of benefits could be achieved by adopting the priority reforms, which would cost up to $2.4 billion a year.
Responding to the report, Mr Morrison announced $53 million to extend the early psychosis youth services program for another year to June 2022.
A further $46 million will go towards extending the national mental health education initiative for another two years, targeting school children.
The Productivity Commission looked at disorders affecting mood, eating patterns, anxiety, personality, psychosis and substance abuse.
The report includes five priority reforms and more than 20 recommendations, including prevention and early help, as well as putting people at the centre of the mental health system.
It recommends mental health professionals be part of police communication centres, as people with mental illness are over-represented throughout the justice system.
Another recommendation focuses on improving housing and homelessness supports. It calls on governments to commit to a nationally consistent policy of not letting people leave institutional care into homelessness.
The report also highlights the plight of international students, many of whom do not have health insurance that covers mental health. It recommends the government amend the Higher Education Standards Framework to force education institutions to provide a student wellbeing and mental health care plan.
The long-awaited report says the mental health of children and families should be a priority, with the pre-pandemic data showing almost one in five Australians experience mental illness in a given year.
The government has boosted mental health supports this year in response to the pandemic, including doubling the number of Medicare supported psychology sessions to 20.
Mr Morrison said he hoped the COVID-19 pandemic would be an inflection point to improve the mental health system.
He said many people had experienced mental health issues for the first time during the pandemic, while noting it disproportionately affects Indigenous communities and veterans.
Labor's health spokeswoman Chris Bowen says the mental health epidemic needs urgent attention, slamming the government for releasing the report months after receiving it.
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