Queensland Health Minister Tim Nicholls confirms there will be no cuts to mental health levy
The state government has confirmed the $1.2 billion mental health levy will not be scrapped, despite a damning report questioning the tax’s administration.
on friday, Queensland Audit Office analysis revealed There were shortcomings in how the levy was administered, amid fears that millions of taxpayers’ dollars were being allocated to services with no evidence of whether the services were achieving their intended results.
The tax, a parliamentary recommendation to create a dedicated funding stream for mental health, alcohol and other drug (MHAOD) services, was introduced in early 2023 and is collected through payroll taxes.
Asked on Saturday whether he would categorically rule out cutting the mental health levy, Health Minister Nicholls said: “Certainly the mental health levy will remain and the Crisafulli government will ensure the mental health levy delivers mental health services.
“I want to be very clear about this.”
He confirmed his acceptance of the tax, saying demand for mental health services continues to increase and this is a significant concern for the community.
Between January 2023 and June 2025, the tax raised $1.2 billion and is expected to raise half a billion dollars more in the first five years than originally anticipated.
But Queensland Auditor General Rachel Vagg said there was no evidence whether the analysis had achieved its intended results, which was largely due to the state government’s failure to surround appropriate governance structures and systems.
Nicholls said the department was working with the treasury on what this would entail and could not confirm the timing of when this would be implemented.
Nicholls said he wanted Queensland Health to determine where the money was spent and what the measure of effectiveness was.
“I think what this report shows is that the mental health tax is being used to deliver outcomes rather than outcomes,” he said. “Yes, more people are working now, but are these workers really producing better mental health outcomes?”
Nicholls said since Labour’s last budget in 2024-25 the government had taken steps to ensure funding was allocated to where it needed to go within the mental health levy.
“We’ve done this by allocating $350 million to services that clearly fall under the mental health levy, which I think Queenslanders will be pleased to receive,” he said.
When asked about changes to the tax threshold, Nicholls said those decisions would be up to the treasurer.
“What I can tell you is that the mental health levy donated to us by the people of Queensland will be used to provide mental health services,” he said.
“So this tax, which is currently 0.5 percent… payrolls over $10 million will be used to provide mental health services. There will be no cut to the mental health tax.”
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Cloe Read is the Brisbane Times’ crime and courts reporter.Connect with: X or email.
