Mental health and suicide is costing Australia $180 billion annually, a major new report says.

In a draft report released on Thursday, the Productivity Commission estimated the $500 million a day cost is because treatment and services “are not meeting community expectations”.

It says one in five Australians experience mental ill-health with this putting an estimated $180 billion per year hole in the economy.

The commission has recommended five “reform areas”, including improving preventative and early intervention measures for mental health and suicide.

Governments should also work to close “critical gaps” in mental healthcare, with more beds in mental health wards and support for people 24/7 if needed.

Long-term housing solutions were also needed for people with severe mental conditions, as were job pathways to help reconnect people with mental illness to employment.

It’s also recommended state and territory governments pool their money together to improve care, with the commission’s preferred option a “fundamental rebuild” of mental health funding arrangements.

Commission chair Michael Brennan said mental health was treated as an “add-on” to the physical health system and this had to change.

“While full-scale change will take a long time, there are many changes that governments can start now,” Mr Brennan said.

“For example, follow-up after attempted suicide is proven to save lives and could be started immediately.”

Our #MentalHealth report is one of our biggest. We’ve broken some of it down into a series of factsheets on health system, consumers & carers, Indigenous Australians, children & youth, work & business, and GPs. Find them here under the ‘At a Glance’ tab: https://t.co/8sTEc961th

— Productivity Commission (@ozprodcom) October 31, 2019

The commission says it “conservatively” estimates mental health and suicide cost the economy $43 billion to $51 billion per year in lost productivity and health system costs.

But there was an additional $130 billion cost associated with diminished health and shorter life expectancies.

The report has also detailed statistics on the breadth of Australia’s mental health problem, with 3.9 million Australians having a mental illness.

One-in-eight GP visits are related to mental health issues with 1.2 million Australians accessing a Medicare-subsidised psychological therapy program.

But one-in-three attended up to two sessions before dropping out because of out-of-pocket costs.

The rate of mental health presentations at hospital emergency departments had jumped 70 per cent over the past 15 years.

Aboriginal and Torres Strait Islander people were twice as likely to die by suicide, with indigenous youth 14 times more likely to die by suicide than non-indigenous youth.

One-in-seven people aged four to 17 have a mental illness.

A year nine student with a mental illness is potentially up to five years behind a student without one.

-AAP