The NSW Government has handed down its 2026–27 Budget. While the Budget includes continued investment in mental health services, there are relatively few new initiatives specifically aimed at expanding access to psychological care.
A notable feature of this year's Budget is the continued use of the Performance and Wellbeing Statement, introduced in 2025–26. The Statement aligns with the Australian Government's Measuring What Matters framework and reflects a broader shift towards assessing government performance through measures of community wellbeing, rather than solely through economic indicators.
For mental health, this means that indicators such as community satisfaction with mental health services are now tracked alongside traditional financial measures. Over time, this approach may broaden to include measures relating to child development, early intervention, school wellbeing, suicide prevention, social participation and equitable access to care. While this represents a positive shift in how governments measure success, it will be important that future budgets are accompanied by targeted investment in evidence-based psychological services to improve these outcomes. AAPi will continue our advocacy in these areas.
Continued investment in mental health infrastructure
The Budget continues significant investment in mental health infrastructure through the Statewide Mental Health Infrastructure Program, with $669.8 million allocated to continue delivering public mental health facilities and services.
This includes:
- $292 million to continue implementing the Statewide Mental Health Infrastructure Program, supporting services for children, adolescents, older people, perinatal mental health and forensic mental health, as well as facilities that promote recovery and community-based care.
- $236.1 million to continue implementation of the Single Digital Patient Record, improving access to clinical information across NSW Health and (hopefully) reducing administrative burden for clinicians.
- $142.4 million for the Key Health Worker Accommodation Program to assist recruitment and retention of health professionals in regional NSW.
Thriving Kids receives significant funding
One of the largest new investments relevant to psychologists is $631.9 million over five years to commence the Thriving Kids initiative.
The program will provide early intervention supports for children aged eight years and under with developmental delay and autistic children with low to moderate support needs.
Funding will support:
- General supports for families, including supported playgroups, parenting programs and peer support.
- Targeted supports, including group and individual allied health therapies delivered by qualified clinicians alongside family support coordination.
AAPi has consistently advocated for early intervention and welcomes investment in improving access to developmental supports. As implementation progresses, it will be important that psychologists play a central role in delivering evidence-based assessment and intervention within the program.
Funding to maintain community mental health services
The Budget includes $112.3 million to continue a range of existing community mental health and suicide prevention initiatives.
This includes:
- $64.8 million to continue mental health and suicide prevention services delivered under the National Mental Health and Suicide Prevention Agreement, including ongoing support for Medicare Mental Health Centres across NSW.
- $43.3 million over four years to continue Lifeline's crisis telephone, text and webchat services.
- $4.3 million to support community mental health peak organisations and community-managed mental health services.
While these investments provide important continuity for frontline services, they largely represent ongoing funding rather than a major expansion of psychology services.
Additional targeted investments include:
- $9.3 million over three years to improve culturally safe mental health care delivered through Aboriginal Community Controlled Health Organisations and Local Health Districts.
- $4.1 million over four years for the Rural Women's Network to continue mental health, first aid and crisis support training in regional communities.
Health workforce investment
The Budget provides $10.3 billion over four years to continue growing the NSW health workforce, with a target of recruiting an additional 9,000 health workers across nursing, paramedicine and allied health.
While psychologists are included within the allied health workforce, the Budget does not outline specific initiatives to expand the psychology workforce or address ongoing workforce shortages. This is a continued area of advocacy for AAPi.
The Budget also includes several broader health initiatives that may indirectly benefit psychologists working within the public health system, including:
- $38.7 million to implement AI-assisted clinical documentation ("AI scribes") for approximately 6,000 clinicians to reduce administrative burden.
- $147.5 million to expand the High Cost, Highly Specialised Therapies Program, supporting access to advanced medical treatments for patients with rare and complex conditions. This initiative relates to specialised medical therapies rather than psychological treatment, but psychologists will be included in multidisciplinary teams.
Domestic and family violence
The Budget includes $184.1 million over four years to strengthen domestic and family violence prevention and response programs.
The $184.1 million is delivered across six frontline programs:
- $76.1 million for the Safer Pathway program, providing coordinated support for victim-survivors across NSW.
- $54.0 million for the Staying Home Leaving Violence program and the Integrated Domestic and Family Violence Services program to help women and children remain safely in their homes after violence, and provide intensive case management for high-risk families.
- $19.3 million for Men’s Behaviour Change programs, to reduce and prevent violent and abusive behaviour.
- $17.5 million for the Domestic Violence Response Enhancement program, providing after-hours assistance to people experiencing domestic and family violence.
- $17.2 million for Specialist Workers for Children and Young People, providing trauma-informed support for children and young people escaping violence.
The 2026–27 NSW Budget demonstrates an ongoing commitment to maintaining public mental health services, investing in infrastructure and expanding early intervention for children. However, there are relatively few new measures specifically aimed at improving access to psychological care or strengthening the psychology workforce.
AAPi continues to advocate for greater investment in evidence-based psychological services across the continuum of care, from prevention and early intervention through to treatment of complex mental illness. Ensuring Australians can access timely psychological care is essential to improving mental health outcomes, reducing pressure on hospitals and delivering a sustainable mental health system.
Further information: https://www.nsw.gov.au/business-and-economy/nsw-budget