Poor mental health costing Aussies $220 billion a year 

17 May 2021

Unions are calling for urgent action on workplace mental health as the Australia Institute and Centre for Future Work released a scathing report that found poor workplace practices that cause mental health issues, such as exposure to violence, cost the economy billions every year.

“Whilst unions welcome the Budget measures for mental health services it is clear that more needs to be done on prevention,’’ the ACTU says.

“Mental health injuries are the fastest, and one of the only growing injury types in our workers compensation system. The Morrison Government has failed to implement preventative measures to stop mental health injuries from occurring in the first place, especially in workplaces’’.

Numerous research reports have clearly shown that nurses are under extreme stress and pressure. This was even before the COVID-19 pandemic hit our shores.

“The pandemic has put nurses under enormous pressure and there has been a huge increase in the number intending to leave the profession across the world,” said ANMF (SA Branch) CEO/Secretary Adj Associate Professor Elizabeth Dabars AM.

A recent study conducted by the Rosemary Bryant Research Centre found that South Australian nurses and midwives were overextended by the practice environment and work conditions, as indicated by high levels of emotional exhaustion over a two-year period, and there remains a risk of burnout.

“Exposure to violence and the underlying fear for your physical safety are also massive issues impacting mental wellbeing within the nursing profession,’’ Ms Dabars said.

“The impact of violence against nurses has been devastating mentally as well as physically, which is why we have been repeatedly calling on governments to act on preventative measures.

“Action to eliminate mental health injuries in the workplace is long overdue and urgently needed.’’

The report, Investing in Better Mental Health in Australian Workplaces, by Liam Carter and Jim Stanford, says Australian society is experiencing an epidemic of mental illness that imposes enormous costs on individuals with poor mental health, their families, and the broader economy. Even before the COVID-19 pandemic, one in five Australians reported mental health challenges of some sort. And the total costs of poor mental health on Australia’s economy, government, and society were estimated by the Productivity Commission (2020) at a staggering $200-220 billion per year.

“Other research confirms the enormous economic costs of mental illness. The fear, isolation, and insecurity which millions of Australians experienced as a result of the COVID-19 pandemic and resulting recession have undoubtedly made this problem worse. Initial data is already confirming a significant increase in mental health problems since the pandemic hit,’’ the report says.

“There is a clear correlation between workplaces and mental health problems in Australia. Workplaces experience significant costs and disruptions as a result of poor mental health. But unsafe workplaces also contribute significantly to the incidence of mental illness and injury.

“Workplace factors which contribute to mental health problems include unreasonable job demands, exposure to violence and trauma, long or irregular working hours, an absence of worker voice and control, and bullying and harassment. Studies indicate 15% to 45% of mental health problems experienced by employed people are attributable to conditions in their workplaces. This suggests that the costs of workplace-related mental illness and injury are enormous: our estimate suggests at least $15.8 billion to $17.4 billion per year in costs arising from workplace-associated mental ill health.

“Eliminating mental health problems caused by work-related factors and stressors would expand Australia’s GDP, and reduce government expenses (for health care and other services) by several billion dollars per year. By modifying workplace practices to eliminate dangerous conditions and prevent psychosocial risks and injuries, a significant proportion of mental ill health could thus be prevented.

“However, Australian employers and WHS regulators have been slow to respond to the epidemic of workplace mental ill health with the attention and forcefulness this crisis deserves. In particular, Australia’s system of work health and safety laws has been effective in reducing physical injuries and illnesses in workplaces, by imposing explicit and well-enforced responsibilities on employers to systematically identify and remove risks from their operations.

“But an equally rigorous approach has not been applied to reducing workplace mental health risks. The current regulatory system does not specify explicit, enforceable requirements compelling employers to take mental health risks equally seriously – nor does it equip workers, their representatives, and regulators with the tools needed to ensure employers live up to those responsibilities. The tragic result is thousands of lives destroyed by preventable mental ill health, and many billions of dollars in lost output and additional fiscal expenses.

“It is past time for Australia’s WHS policy-makers to address the mental health crisis in Australia’s workplaces head-on. Upcoming decisions regarding reforms to Australia’s Model WHS Laws provide a crucial opportunity to modernise Australia’s practices, and catch up with other industrial countries – which already treat psychosocial risks in workplaces with the same urgency and rigour as they combat physical health and safety dangers. The economic and fiscal benefits of preventing workplace-associated mental illness and injury are substantial – and would be shared by employers, governments and workers alike. But the human benefits of preventing needless mental health illness and injuries, for affected workers and their families, are priceless.’’

On Thursday, May 20, Work Health and Safety (WHS) Ministers from the States, Territories and the Federal Government will vote on key changes to WHS laws. “Minister Cash can use her vote – likely the deciding one - to support changes to WHS laws that would finally require employers to identify and address risks to mental health, in the same way they are required to with risks to physical health,’’ the ACTU says. “If the Coalition is serious about psychological health we expect Minister Cash to support these changes.’’

Click here to see the Investing in Better Mental Health in Australian Workplaces report.