Skip to main content

A staggering $7.4 billion could be ripped out of the NSW economy by 2025 because of higher rates of depression and anxiety and lost productivity amongst workers, according to a new report released today.

This economic cost comes off the back of an estimated increase of 171,615, or 21 per cent more people in NSW experiencing mental health issues consistent with depression or anxiety during 2021, as a result of extended COVID lockdowns.

Other evidence of worsening mental health for people in NSW set out in the report includes:

  • a 46 per cent increase in the number of 12-17-year-old females presenting at hospital emergency departments for self-harm or suicidal thoughts between 2018 and 2021; and
  • a 9.3 per cent increase over the same period in prescriptions for depressive disorders, more than double the rate of increase for all other medications.

These are some of the troubling findings from the first chapter of Aftershock: Addressing the Economic and Social Costs of the Pandemic and Natural Disasters, a new research series into the impact of events of the past two and a half years on people in NSW.

The first chapter, focused on mental health, reports on the personal and economic toll of poor mental health and the groups who are disproportionately affected.

The Impact Economics and Policy research commissioned by the NSW Council of Social Service (NCOSS) and other peak bodies, including the Mental Health Coordinating Council, also outlines the importance of community-based services and supports in helping people recover from negative shocks.

NCOSS CEO, Joanna Quilty, said the research underlines the devastating impact this uncertain and difficult period has had on people’s mental health across the state.

“There were already significant economic and social costs associated with mental health before the COVID-19 pandemic and spate of natural disasters that have befallen NSW over the past two years,” Ms Quilty said.

“Prior to COVID, the Productivity Commission estimated direct costs to the Australian economy from poor mental health at between $40 and $70 billion each year.

“But we know that people’s mental health worsened as a result of extended lockdowns across our state and that it was women with young children who were most affected. On top of that, natural disasters have since added to the picture of rising psychological distress across communities in NSW.

“For those in the workforce, worsening mental health may translate to increased absenteeism, or turning up to work but not being as productive because of feeling anxious or depressed,” Ms Quilty said.

“The modelling puts the cost of this for NSW, at $7.4 billion over 5 years.

“And this is conservative, with the modelling looking only at the impacts of COVID lockdowns on NSW’s working population – it doesn’t take into account natural disasters or mental health impacts for the whole community.

“This is a health and economic disaster, exacerbated by events such as the Northern Rivers floods.

“We know that it’s the poorest people who have been most devastated by the floods, and that they were already five times more likely to experience high or very high rates of psychological distress compared to the wealthiest Australians.

“Many have lost everything and face an uncertain future and a long road to recovery. More needs to be done to get them back on their feet and support their mental health in the process. Investment in community based services and supports is vital to supporting recovery and minimising the risk of worsening mental illness.”

CEO of Mental Health Coordinating Council, Carmel Tebbutt reiterated that the research indicates that specific cohorts have been more significantly impacted by the pandemic and natural disasters in recent years.

“The psychological effects of a disaster are more drastic among children, women and the dependent elderly – they are the most vulnerable populations and should therefore be the focus of interventions,” Ms Tebbutt said.

“Women aged 16-24 already have the highest prevalence of poor mental health in NSW and are twice as likely to develop post-traumatic stress disorder.

“People with a disability are four times more likely than people without a disability to experience high levels of psychological distress and are up to four times more likely to die during a natural disaster.

“COVID also disproportionally impacted people with a disability, due to lack of access to vaccines and interruptions in usual services and supports.

“Community mental health services are vital in responding to disasters as they reduce the burden of mental illness by supporting recovery and minimising the severity and long-term risks.

“We commend the NSW Government spending $2.9 billion on mental health services in 2022-2023, representing a 21 per cent increase on 2020-2021, however the spend on vital residential and community mental health services falls behind other states.

“We know that about 154, 000 people across Australia with severe and complex mental illness are missing out on psychosocial support services.

“Community living and accommodation supports, including the ‘step-up, step-down’ model, reduce risks and deliver better long-term outcomes for people transitioning back into the community from psychiatric inpatient facilities.

The peak bodies are urging the NSW Government to respond to the dire need through a range of targeted investments.

“We are calling on the Government for an additional 600 step-up, step-down beds to reduce the number of admissions and re-admissions to acute care facilities as the mental health impacts of COVID and other disasters continue to play out,” Ms Tebbutt said.

“Step-up, step-down services provide a supportive home-like, therapeutic environment for people in need of this intensive support. These services have demonstrated that they represent a sound investment, delivering long term cost savings including a reduction in re-admissions.”

Ms Quilty also highlighted that trusted place-based organisations play an essential role in supporting people in the immediate aftermath of a disaster, and in fostering wellbeing and social connection through the recovery process.

“Some people may be wary of government services or not inclined to access clinical care through the mental health system.

“But they can benefit from the practical assistance, informal support and sense of belonging that their local neighbourhood centre, Aboriginal Community Controlled Organisation or youth service can provide.

“These services are not considered part of the mental health system, but they can be a lifeline for people in need, with no one to turn to.

“While this research is telling and robust, it is only the tip of the iceberg – as more data becomes available about the effects of the COVID-19 pandemic and natural disasters a fuller picture will emerge.

“It’s time for all governments to listen to the sector about mental health care models and the urgent need to fund prevention and community services.

“Investing in more services today will help address the ongoing impact of the COVID-19 pandemic and natural disasters on mental health and reduce the long-term impacts on wellbeing and productivity,” Ms Tebbutt said.

For more information, visit

Media contact: Nick Trainor 0407 078 138

Media note

This report includes information about poor mental health, suicide and self-harm data in NSW. We acknowledge that behind each of these numbers are people, their families and their friends that are deeply impacted by suicide, self-harm and poor mental health. Some people may find the contents of this report distressing and confronting. If impacted in anyway, please contact Lifeline, 13 11 14.

Further information

‘Step-up, step-down’ services support people transitioning from psychiatric inpatient facilities back into the community. These services provide an opportunity for a person to be discharged and supported to manage when returning home and provide more intense support for people at risk of deterioration. As a result, these services free up capacity in in-patient units and reduce the risk of revolving door admissions.

In addition, step-up, step-down services can help reduce the risk of suicide following discharge from inpatient units. The current risk of suicide at time of discharge in NSW is 100 times the general population risk.

Download Media Release

Read Report Aftershock: Addressing the Economic and Social Costs of the Pandemic and Natural Disasters