By Kieran Rooney and Rachel Eddie
Mental health programs are being hit with redundancies and hiring freezes as hospitals search for savings to bring them in line with budgets proposed by the Allan government.
Health services across the state are looking for savings to meet model budgets put forward by the Department of Health, as the government tries to bring spending under control due to rising state debt.
The Royal Children’s Hospital in Melbourne is among those proposing redundancies as part of budget discussions. Credit: Chris Hopkins
As part of separate funding discussions, mental health programs have also been reviewed.
In a letter seen by The Age outlining expected changes, the Royal Children’s Hospital is proposing to make six programs and teams redundant in its mental health department, including a team focused on early intervention for children and adolescents with behavioural challenges.
The proposed redundancies, expected to affect up to 15 staff if finalised, would mean a reduction in the number of consultant psychiatrists on call. Positions created to provide expert advice to management would also be cut.
“In order to deliver more focused and strategically aligned services, and to work within funding parameters, the focus of the RCH mental health department will be on providing core clinical services,” the letter reads.
The hospital also acknowledged that closing its early intervention program for children and adolescents would probably move demand from patients to other areas. It forecast a possible rise in referrals for community mental health services.
In the letter, the hospital said it would monitor the impact on referrals and waiting times for patients and respond.
Mental health departments will also be among those affected by hiring freezes being brought in across the system, including those revealed by this masthead at two of Melbourne’s biggest health services, Northern Health and Western Health.
Both services have announced recruitment holds as they work to rein in spending. The freezes do not apply to emergency department roles, but other jobs viewed as critical will be assessed case by case.
Health and Community Services Union state secretary Paul Healey said staffing freezes and potential redundancies would threaten the quality of care mental health workers provided.
“At a time when demand for mental health services is soaring, cutting staff is not just short-sighted – it’s dangerous,” he said.
“When staff leave and aren’t replaced, those left behind face dangerously increasing workloads.
“We’re entering negotiations with a clear message: invest in our mental health workforce or risk a crisis in care. Adequate staffing, manageable workloads, and fair wages aren’t just union demands – they’re essential for the wellbeing of both our workers and the vulnerable Victorians they support.
“The proposed cuts to health services fly in the face of everything we know about effective mental health care. Our members are already stretched thin. Further reductions in staffing will only exacerbate burnout and compromise care.”
A spokesperson for the Royal Children’s Hospital said it regularly reviewed these services to ensure they were in line with the Department of Health’s funding priorities for the sector, but the changes were separate to the government’s Budget Action Plan.
“The proposed changes to RCH Mental Health will not impact frontline services,” they said.
“The proposed changes impact historic programs that no longer align with the focus of Victoria’s broader mental health system.”
A government spokesperson said it was investing $20 billion into hospitals in this year’s budget.
“Our mental health investment this year alone is almost $3 billion, which is almost double the budget before the royal commission [into the state’s mental health system],” they said.
“Only Labor invests in our health system. The only political party that cuts and closes hospitals is the Liberal Party.”
In the state budget, the government committed to providing an additional $8.8 billion in upfront funding to hospitals over the next four years. This was part of a new funding model under which health services have been told they will not have their finances topped up when they go into debt, as had been the case in previous financial years.
Opposition health spokeswoman Georgie Crozier said cuts would have flow-on effects.
“The government’s savage funding cuts are going to put more pressure on our emergency departments and emergency services and that will have a negative [effect on] good patient outcomes,” she said.
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