When the mental asylums of last century shut down in the '60s, '70s and '80s, the great social vision was to allow people with mental illness greater independence and the ability to integrate into society better.
Instead, Prime Minister John Howard said yesterday, they have been left homeless and in jail.
A $1.8 billion federal funding package was announced yesterday to bridge the gaps in care that leave people with mental illness suffering and forgotten by society.
"If you go back in the mists of time in relation to mental health, when deinstitutionalisation occurred, the thought was you'd have some kind of intermediate accommodation," Mr Howard said.
"You'd have something between the old mental institutions, which for a combination of reasons we felt were no longer the right way to go, and the situation we have now where there's really nowhere to go."
The Federal Government has called on state and territory governments to help fund support accommodation.