Australian Election 2025: Labor splashes $1bn on the ‘missing middle’ of youth mental health

A “missing middle” in mental health care is forcing many young people into hospital, but Labor is pledging $1bn it hopes will change that.

A re-elected Labor government would build 20 new youth specialist mental health centres as part of a massive $1bn investment in the country’s mental health, which Labor says will help keep young people out of hospital.

The Prime Minister has announced $500m will be spent on the centres to cater to the “missing middle” – young people with personality disorders or early psychosis needing ongoing care but who often end up in hospital.

A further $225m will be spent on 31 new and upgraded Medicare Mental Health Centres, as well as more than $200m for 58 new, upgraded or expanded Headspace services, and $90m for more than 1200 training places.

Anthony Albanese has pitched the election as a make or break moment for Medicare and denounced American-style healthcare.

“I want everyone, and especially young people, to be able to access the mental health care they need,” Mr Albanese said.

“Whether you need short-term support or ongoing care, young or old, we will ensure that a free, mental health service backed by Medicare will be there for you and your family.

“Only Labor has a plan to strengthen Medicare.”

Health Minister Mark Butler hit out at the Opposition, saying “Peter Dutton isn’t ready for government or the hard work of policy development or reform, and nowhere is this clearer than in mental health.

Prime Minister Anthony Albanese has pitched the election as a make or break moment for Medicare. Picture: Jason Edwards / NewsWire

Mr Butler said the Opposition Leader was “promising to repeat the mistakes of the past” by putting more demand on private psychologists, driving up gap fees and making mental health waitlists longer.

“You can’t double the number of sessions without doubling the number of psychologists, or you create a bottleneck that means tens of thousands of Australians get no help at all,” Mr Butler said in a statement on Monday.

The investment was welcomed by Mental Health Australia chief executive Carolyn Nikoloski, who described it as a “landmark investment that recognises the challenges the community is facing” which would increase free services.

It joins a number of already announced projects, including the National Early Intervention Service which will kick off on January 1, 2026, 61 Medicare Mental Health Centres, and bulk-billed telehealth psychiatry.

A 2024 report by the Royal Australian College of General Practitioners found the rates of mental illness among young people had increased by a whopping 50 per cent over a period of just two decades.

The peak age for the onset of mental health conditions was now just 15 years, with 63-75 per cent of onsets occurring before the age of 25, according to the Lancet Psychiatry Commission on Youth Mental Health.

The Commission, led by Australian organisation Orygen, found the changing landscape for mental health among youth included “global political, socio-economic and structural megatrends driving psychological distress”.

Opposition Leader Peter Dutton previously promised to match Labor’s $9bn Medicare investment. Picture Thomas Lisson / NewsWire

Oxygen CEO Professor Patrick McGorry AO said the Albanese government’s plan, including expanded Headspace and new youth health clinics, showed the government was responding “decisively to the youth mental health crisis”.

“All Australians, especially young people and their very worried parents, will deeply appreciate this groundbreaking commitment to build the next stage of our world leading system of youth mental health care and to respond to the dramatic increase in prevalence that is causing widespread suffering and undermining our society,” he said.

In NSW, 12 Headspace and Medicare Mental Health Care centres will be upgraded, five will be built, and one reopened; in Victoria, 11 will be upgraded and two built; in Queensland, 11 will be upgraded and five built.

The ACT will miss out on any new facilities or upgrades, while Western Australia will have two upgraded and six built; South Australia will have three upgraded and four built.

In Tasmania, one will be built and two upgraded, while in the NT two will be upgraded.

Originally published as Australian Election 2025: Labor splashes $1bn on the ‘missing middle’ of youth mental health