Coronavirus: depression ‘a $5bn hit to productivity’

The looming mental health crisis is set to cost up to $5bn in lost productivity and threatens to undermine the economic recovery.

Orygen executive director Professor Patrick McGorry at the Parkville Centre in Melbourne.

The looming mental health crisis linked to mass unemployment is set to cost up to $5bn in lost productivity and threatens to undermine the longer-term economic recovery, according to new modelling of the national wealth impacts of COVID-19.

The “tsunami of newly unemployed” and the disruption to ­education and training for young people is forecast to deliver at least a $4.5bn hit to economic productivity over the next five years and could lead to the greatest ­decline in national wealth since the Great Depression.

Under a worst-case scenario of a 15 per cent jobless rate, almost $1.2bn would be lost in productivity next year alone due to unemployment and its associated mental health issues.

This would accumulate over the next five years unless the unemployment rate could be turned around quickly. At least 10 per cent of the total loss of productivity could be attributed to an increase in mental health problems and suicide directly related to COVID-19.

The modelling was conducted by Sydney University’s Brain and Mind Centre, which last week released health impacts using the same world-first modelling system to predict the potential for a 50 per cent increase in suicides due to mental health issues triggered by financial distress, unemployment and social isolation.

National cabinet is expected to consider a major second-stage mental health package later this week, with federal Health Minister Greg Hunt saying the country had got ahead of the COVID curve and now needed to get ahead of a mental health curve.

Former Mental Health Commissioner and head of the Brain and Mind Centre, Ian Hickie, told The Australian the new modelling showed the total productivity costs associated with COVID-19, and the “subsequent increased mental health burden”, repre­sented almost 7 per cent of baseline productivity.

“Prior to COVID-19, mental ‘wealth’ in Australia was worth 4 per cent of GDP. Unless we act now, and effectively, we face the greatest loss of that national wealth since the Great Depression,” Professor Hickie said.

“The tsunami of newly unemployed and the disruption of education and training, particularly in young people, means that we are in danger of losing a whole generation of productive lives.

“The loss of mental wealth will be greatest in the outer urban and rural and regional areas. These are the regions where young people already had less opportunity and where recession will hit hardest.

“Our new modelling indicates what traditional economic models omit — namely, the circular relationship between lost productivity and mental ill-health.

“The most conservative estimate is that at least 10 per cent of lost productivity is due to mental ill-health and suicide. It is likely that the real cost is twice that amount. Not only does the economic downturn cause mental ill-health, but that ill-health feeds back into long-term loss of productivity,” Professor Hickie said.

“Fast, targeted interventions to keep people in jobs and education is the key to maintaining our mental ‘wealth’. We need an honest, open public discussion and co-­ordinated national action.”

Patrick McGorry, the executive director of youth mental health ­organisation Orygen­, last week ­released a report showing mental health problems triggered by COVID-19 would claim more lives than the virus itself. “Modelling suggests the pandemic may give rise to 25 per cent more suicides, with up to 30 per cent of those … aged 15-25 years,” the report says.