The early warning that put a price on fixing the state’s psychiatrists crisis

The NSW mental health minister has been accused of misleading the public after internal documents suggest boosting the pay of the state’s public hospital psychiatrists would cost hundreds of millions less than the $700 million taxpayer price tag.

PowerPoint presentation slides delivered by NSW Health’s chief medical workforce adviser show that giving staff specialist psychiatrists a 25 per cent pay rise to fill 416 positions would cost an additional $24.9 million annually from 2025.

The documents from early 2024 also revealed the government was aware of the extent of the recruitment and retention crisis across the state’s acute mental health services, in which almost one-third of staff specialist positions were vacant, and the system’s reliance on casual labour, almost a year before the psychiatrists’ mass resignations.

The $24.9 million figure would bring the total cost to $125 million per year to pay 416 staff specialist psychiatrists at level 4 award rates (the equivalent of a 25 per cent bump), amounting to $500 million over four years.

The 25 per cent pay rise was proposed by senior members of the Royal Australian and New Zealand College of Psychiatrists in the months before the slides were presented.

The state’s public psychiatry crisis worsened early this year when 205 staff specialists threatened a mass resignation. About 50 went through with the resignation and many returned to their roles on contracts.

Last week, Mental Health Minister Rose Jackson told media outlets that the pay rise would cost $700 million.

In parliament on Tuesday, Jackson clarified $700 million was the total cost over the forward estimates.

In a statement on Monday, Jackson said the figure in the slides “refers only to the direct payroll cost of a 25.5 per cent increase for psychiatrists employed at a single point in time”.

“It doesn’t account for entitlements like leave and training, future cost escalation, or the full workforce, including VMOs [visiting medical officers],” Jackson said.

“The cost of the 25 per cent pay rise for all psychiatry positions is approximately $790 million over the forwards and planning years. The cost of the substantial and additional conditions that ASMOF [Australian Salaried Medical Officers’ Association] is seeking pushes these costs even higher.”

Dr Kathryn Drew, a senior psychiatrist and former clinical director, said the slides showed the government had been dishonest with the public about the cost of the proposed pay rise throughout the dispute and knew the system had depended on contractors since early 2024.

“It is just horrifying,” Drew, who resigned in January, said. “I’ve spent some time trying to determine where $700 million comes from … It just makes no sense.”

Greens Health spokeswoman Amanda Cohn, who obtained the slides through a parliamentary call for papers, said making a meaningful offer when the modelling was presented may have prevented the mental health care crisis NSW is now facing.

“If the NSW government were serious about resolving its dispute with staff specialist psychiatrists, it would be transparent about its costings,” Cohn said.

“Citing wildly inconsistent figures shows they aren’t serious about finding a way forward to recruit and retain permanent staff to provide mental health care to the most vulnerable people in the state.”

Dr Nick Spooner, president of ASMOF NSW, characterised Jackson’s comments as “misinformation at best, or deception to diminish support for the public psychiatrists”.

“It is saddening,” Spooner said. “What we have seen from Minister [Rose] Jackson and the government has been inflated costs without the context of what they are referencing.”

The slides show that staff specialist vacancies had more than doubled from 2019 to 2024 and visiting medical officer contracts jumped from 351 in 2022 to 430 in 2023.

The data collection and modelling detailed in the slides followed several meetings between Jackson, Health Minister Ryan Park, the Health Ministry, and senior psychiatrists who raised the alarm over the specialty’s recruitment and retention crisis.

“Many rural LHDs don’t even try to get staff specialists,” Drew said. “They just run on VMOs.”

The government has offered a 10.5 per cent increase over three years, which includes superannuation, a six-month pilot project to improve conditions and efficiency to enable further pay increases, and a 10 per cent onerous duties increase.

Job listings sent to psychiatrists advertise “crisis” rates of up to $3050 a day, accommodation and travel allowances to locums. The positions do not include staff provisions such as annual and sick leave.

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