The parlous state of mental health services, including state-federal divisions over funding responsibility, will be investigated in a wide-ranging Senate inquiry.
The inquiry comes amid rising concerns about the failure of governments to tackle mental health. It will investigate the lack of hospital and community care, chronic shortages in crisis services and the growing demand for care of the young, homeless and prisoners.
It will examine resources in key areas such as after-hours crisis services and respite care.
The parliamentary secretary with responsibility for mental health, Christopher Pyne, backed the inquiry last night and asked that it include indigenous Australians as well as special training for doctors and nurses.
Mr Pyne believes that if the states cannot deliver adequate mental health services they should hand responsibility for them to the Commonwealth.
The Herald expects a deal to be struck between Government and Democrat senators on the terms of reference and committee format for the inquiry.
It is scheduled to begin after the already announced closed-door investigation into the case of Cornelia Rau, the mentally-ill Australian resident who spent 10 months in immigration detention after authorities failed to recognise her schizophrenia.
In a separate development, Telstra responded to public criticism yesterday by backing down on its decision to cancel funding for Lifeline, the nation's only general 24-hour phone crisis counselling service.
The Prime Minister, John Howard, who intervened to help save Lifeline, made it clear that improving mental health services was a Government priority, although the "appropriate division" of responsibility and funding between the states and Commonwealth was likely to be an issue.
The Senate inquiry was welcomed last night by mental health leaders, who said the system was dramatically under-funded and under-serviced because of blurred accountability between the federal and state governments.
A landmark report in 2003 found the mentally ill were one of the most chronically disadvantaged groups in Australia, yet were continually ignored.
The system "repeatedly fails consumers, their families and carers right across the spectrum from early intervention to acute and ongoing care", declared the report Out of Hospital, Out of Mind, produced by the Mental Health Council of Australia.
"Almost every family in Australia has been touched directly by mental illness and has experienced difficulties in getting access to care at the time they most need it," the council's chief executive, John Mendoza, said last night.
The leading psychiatrist Ian Hickie said that despite having a world-best national policy for the past 12 years Australia had failed to fund mental health adequately.
Mental illness represented 27 per cent of Australia's disease burden but received only 6.4 per cent of health funding.
The Liberal senator who drafted the terms of reference for the Senate inquiry, John Tierney, said mental health was fundamentally the responsibility of the states, but, after reforms in the 1980s, had been left in disarray.
Senator Tierney welcomed Telstra's decision to continue supporting Lifeline, which took 501,594 calls from people in distress last year. He said he would still introduce a private member's bill to make the 13 11 14 number part of Telstra's service obligation, along with triple-0.