Jump to the section you're most interested in:
- Addressing the gap in psychology services and capacity
- NDIS reforms
- Medicare rebates that reflect the true cost of providing psychology services
- DVA fee increase
- Digital Mental Health and AI support
- Paid placements to ensure equitable access into the profession
- Investment into Australia's resilience and social cohesion
- Streamlined GP mental health reviews
- Better access to neurodevelopmental assessment
The Federal Budget 2026-27, delivered earlier this week, left much to be desired. Here's where we believe investments need to be made, and, therefore, what we will continue advocating for.
Going into Tuesday night’s Federal Budget 2026-27, the APS remained clear-eyed about the fiscal challenges facing the Government.
With the global economic landscape tightened by ongoing conflict in the Middle East and the subsequent pressure on Australia's fuel security and cost of living, we anticipated a conservative Budget with limited room for significant new spending.
However, we maintained that during periods of heightened economic stress, investment in the mental health and wellbeing of Australians is not a luxury, but a fundamental health and economic necessity.
While the Budget did offer sensible measures in areas we have long advocated for, it ultimately failed to deliver the broader, systemic recognition of the psychology profession required to meet rising community needs.
“We went into this Budget with strong proposals and constructive engagement with Government,” says Dr Kelly Gough, President, APS. “But the 'unfinished business' of this Budget remains the missed opportunity to proactively support the mental health of a nation currently under significant strain.”
Dr Zena Burgess, CEO of the APS, said that the APS’s Pre-Budget Submission 2026-27 highlighted a range of “innovative, practical and future-facing initiatives” that would integrate critical mental health resilience into the Australian community and, crucially, have been modeled to show they return more financial value to the Australia economy than they would cost.
“The lack of direct focus on mental health support in this year’s Budget will not deter us from continuing to advocate for support and investment to create an accessible, capable and future-focused psychology profession.”
Below, we highlight the areas where the APS feels the government has fallen short and reinforce our proposed solutions.
APS members can read our initial analysis of the Budget here.
1. Addressing the gap in psychology services and capacity
While our profession is growing, it's not growing fast enough to meet the escalating needs of the Australian public.
The Psychology Supply and Demand Study, released by the Department of Health, Disability and Ageing in April, highlights that access to psychology services is already under immense strain.
The report indicates a 57.3% shortfall in health settings for 2025 – a gap projected to widen to 96.6% by 2038 if current trends continue. That would mean a requirement to almost double our existing workforce to meet that demand.
"These figures represent a clear and growing gap between demand and supply, but they also don’t tell the full story. We know there is a significant maldistribution of our workforce. While some of our members and the communities they serve are under immense pressure every day, others are concerned about a lack of waitlists, gaps in their calendars, and what that means for the survival of their businesses," says Dr Gough.
"These are real issues and the uncertainty they create is significant. The APS will ensure that psychologists' expertise is the blueprint for change, providing the trusted representation and collective voice needed to secure the future of our profession."
APS's advocacy in this space focuses on five key pillars:
- Expanding training pathways to secure the future workforce.
- Strengthening supervision and early-career development.
- Reforming funding and Medicare to fully unlock the potential of the existing workforce.
- Targeted investment in public and rural mental health services.
- Improving workforce data through robust, profession-led research.
"We are calling on the Federal Government to scale investment and work in genuine partnership with the APS to take decisive, coordinated action in these areas.”
2. NDIS reforms
Last month, the Government announced sweeping changes to the National Disability Insurance Scheme (NDIS), which it plans to roll out over the next four years. This includes cuts to the Scheme, which the Government says would result in savings of $36.2 billion.
The NDIS is projected to grow slowly – lower than inflation – which will result in significant cuts to eligibility, funding and supports in real terms. The Government is calling this a “reset” of the system, revealing some aspects of the changes last month and filling in the gaps in this week's Budget.
On Budget night, we learned more about the timeline of these proposed changes.
Changes to determining access based on standardised assessments of functional capacity will not commence until 1 January 2028. However, participants’ budgets for social, civic and community participation supports and capacity building daily activities will be progressively cut from 1 October 2026, as plans are reassessed or renewed.
Dr Gough says while the APS is supportive of a "sustainable, well-governed NDIS", and is cognisant of the strain that unchecked growth is putting on the Scheme, he is concerned that this could come at the expense of the people the NDIS is designed to support.
"There is a strong commitment from our membership to meet the support needs of NDIS participants. It’s such important work. We've even heard stories from members who chose to become a psychologist so that they could support NDIS participants.”
The APS will continue to advocate for:
- Psychologists being recognised as essential to the NDIS achieving its purpose;
- A reversal of planned cuts to supports funded under the capacity building daily activities so that participants can continue to access needed psychology supports with certainty and confidence;
- Psychologists' role in providing capacity-building supports being protected through this package of reforms;
- Foundational supports for adults with psychosocial disability being progressed without further delay;
- Eligibility assessment frameworks being co-designed with ongoing clinical input including from psychologists; and
- Psychologists to not be unfairly targeted as part of punitive fraud and compliance initiatives, or subject to unnecessary registration requirements.
APS members can read more about the proposed NDIS changes here.
3. Medicare rebates that reflect the true cost of providing psychology services
In the current economic climate, affordability has become the primary barrier to mental health care.
For too long, Medicare rebates have failed to keep pace with inflation and the genuine costs of delivering high-quality psychology services.
This stagnation has placed many of our members in the difficult position of absorbing unsustainable financial pressure to protect their clients from rising out-of-pocket expenses.
Unfortunately, the Budget did not deliver on the improved access to mental health care for all Australians that the APS called for, including introducing a $0 Medicare safety net threshold for young people seeing psychologists through Better Access and bulk billing incentives.
To improve affordability, the APS will continue to call for an increase in Medicare rebates for psychology services, alongside annual indexation in line with CPI. These measures are essential to enable access to much needed mental health care.
"When rebates fall behind, it’s the community that suffers," says Dr Gough. "Appropriate pricing and indexation are fundamental to a viable, ethical mental health system."
He emphasises that this reform is a matter of equity.
"Aligning rebates with the real cost of delivery is the most effective way to reduce out-of-pocket costs for low-income, rural and remote Australians.
“By supporting the workforce in this way, the Government would improve wellbeing outcomes for vulnerable Australians, by increasing access to psychological care and avoiding the significant social and economic costs of delayed treatment.”
4. DVA fee increase
The Government also announced an increase in the Department of Veterans’ Affairs (DVA) allied health provider fees. For psychologists, the only information available at this point is an increase in the fee for a 50-minute in-rooms consultation with a non-clinical psychologist from $163.40 to $260.
“We are supportive of the Government’s acknowledgement of the specialised skills required to support veterans’ mental health,” says Dr Gough. “While this is in line with recommendations from the Royal Commission, we note that the specific details remain limited.”
Currently, the only known details pertain to one item number for non-clinical psychologists.
“We also note that a $5000 Annual Monetary Limit on allied health services applies each financial year, which we are concerned could restrict treatment and lead to lowered funding in the future.”
With the annual limit in place, a veteran would only be able to access a maximum of 19 sessions with a psychologist per financial year and only if no other allied health services are accessed.
Although extensions are possible based on need, the detail is yet to be provided about the process, the APS will insist that the recommendation is based on the professional advice of the treating psychologist.
We are calling on the Government to work in collaboration with the APS to ensure that the treatment review process for psychology services is undertaken in an evidence-based manner that is beneficial to veterans, their families and psychologists.
In conjunction with this change, the APS welcomed the news of the removal of the Treatment Cycle, which will streamline referrals and, if implemented effectively, could lead to more timely access to psychology services.
The 'unfinished business' of this Budget remains the missed opportunity to proactively support the mental health of a nation currently under significant strain. – Dr Kelly Gough, APS, President.
5. Digital Mental Health and AI support
To keep abreast of the rapid changes in artificial intelligence (AI) and Digital Mental Health Services (DMHS), the APS has been asking for collaborative benchmarking and evaluation of AI and DMHS to ensure they are reliable, safe and appropriately integrated into human-centred models of care.
"As the cost of living continues to rise, we know that more Australians are turning to AI-driven tools and chatbots for mental health support," says Dr Burgess.
In this period of profound change, psychologists – grounded in science, ethics and rigorous research – are already leading the conversation on how these technologies are designed and implemented.
"While the APS recognises the powerful possibilities that digital mental health services afford, we must remain vigilant. Our focus is on ensuring that technology does not solidify existing inequities, create fresh risks or lead to unintended consequences for the wellbeing of the Australian community."
In an era of rapid automation, the ethical oversight and clinical expertise of a qualified psychologist remain more essential than ever.
Both the Australian community and the psychology profession have been calling for clear regulatory guidance and robust support to ensure the safe, ethical and effective implementation of AI – particularly within healthcare settings.
The absence of targeted funding in this year’s Budget represents a significant missed opportunity to get ahead of the curve.
“Without dedicated investment to develop these frameworks, we risk a scenario where rapidly evolving technologies outpace our clinical safeguards,” says Dr Burgess.
The APS remains committed to ensuring that AI serves as a tool to support, rather than hinder or replace, the indispensable expertise of psychologists within a high-quality mental health system.
6. Paid placements to ensure equitable access into the profession
To ensure more psychologists can enter the profession and begin closing the critical gap identified by the Department of Health, Disability and Ageing's report, the APS is maintaining its strong call for the Federal Government to address the financial hurdles of postgraduate study.
Currently, unpaid placements required in post-graduate study act as a significant barrier for many would-be psychologists due to the financial constraints associated with being a student.
"We must address these barriers if we are to encourage a larger, more diverse cohort of next-generation psychologists to meet the nation’s growing demand," says Dr Burgess.
"The financial pressure on our students means that the cost of becoming a psychologist is a significant burden.”
The APS has long called for the Commonwealth Prac Payment system to be extended to postgraduate psychology students (inclusive of annual loadings for rural and remote placements).
While it is disappointing that these measures were not prioritised in this year’s Budget, the APS remains resolute.
Dr Burgess affirms that this remains a top priority for the APS as it works to safeguard the next generation of our profession.
"Advocacy is rarely a single moment in time; it is a sustained effort," she says. "We will continue to raise this with the Government, ensuring they understand that supporting our students is an essential investment in the mental health of all Australians and safeguarding the future of our profession.”
7. Investment into Australia's resilience and social cohesion
Climate-related and collective trauma events are placing sustained psychological strain on our communities and the workforces that support them.
While support often focuses on the immediate aftermath, the APS Disaster Response Network (DRN) has proven the vital necessity of psychologist-led support for frontline workers – from preparation through to long-term recovery.
The DRN model provides evidence-informed wellbeing checks for both paid and volunteer frontline workers. Since February 2024, the network delivered 1,837 wellbeing services, demonstrating the value of a coordinated, profession-led response.
"Psychological preparedness is an essential pillar of disaster readiness," says Dr Burgess. "By scaling this model, we aren't just protecting individuals; we are ensuring that the people who sustain our communities have the resilience to withstand and recover from the unique pressures of their roles."
The APS is calling on the Federal Government to sustain and scale the DRN, recognising that a resilient frontline is the backbone of a resilient Australia.
The APS welcomed the $42.9 million investment over two years to provide immediate mental health supports to the Jewish community, the broader Bondi community, first responders, children and young people in the wake of the Bondi antisemitic terrorist attack.
“We also welcome funding committed to combating antisemitism, violent extremism and hate in Australian communities.”
8. Streamlined GP mental health reviews
The current approach to mental health reviews under the Better Access initiative can create unnecessary barriers to the ongoing therapeutic process.
These administrative requirements can increase the cost of seeking help, cause delays in treatment and add a significant burden to clients, GPs, and psychologists alike.
The APS will continue to call on the Government to streamline the Medicare referral process so reviews occur when they are most clinically meaningful, such as at the conclusion of treatment or when session limits are reached.
This shift would preserve essential collaboration between GPs and psychologists, while removing the red tape that hinders continuity of care.
"This is about addressing friction within the system, not removing safeguards," says Dr Gough.
"By removing unnecessary referral and review requirements, we reduce out-of-pocket costs for clients and ease the immense pressure currently facing GP practices.
"It's a common-sense change that cuts administrative burden for clinicians and aligns our mental health system with the flexible, needs-based care that Australians deserve."
9. Better access to neurodevelopmental assessment
The Treasurer announced $126.1m will be provided over five years to support the early identification of children with developmental delay or neurodevelopmental difference, through a Medicare funded three year-old health assessment (undertaken by GPs) and an expanded Comprehensive Health Assessment Program.
We know that comprehensive assessment of complex neurodevelopmental disorders is the cornerstone of early intervention. Screening and early identification without also investing in comprehensive psychological assessment could lead to further gaps and delays in the system.
The APS is calling for a redesign of MBS items to support uninterrupted, psychologist-led assessments.
"Our goal is to ensure that the assessment process remains as robust and streamlined as possible," says Dr Gough. "By modernising these MBS items, we are protecting the clinical validity of the work our members do and ensuring that children with complex needs don't fall through the gaps of a fragmented system.
“I am hopeful that one day we can move to a truly equitable system where undiagnosed adults with these conditions can also receive funding to access the diagnostic clarity and treatment they require.”
Ongoing advocacy
While the Budget did not deliver on the level of reform the APS has been advocating for, this doesn’t mean we won’t continue to propose evidence-based solutions that we know will enhance the wellbeing of our nation and future-proof our profession.
This critical advocacy work, which is informed and supported by many of our members, will continue.