Research shows economic cost of declining mental health
26 August 2022 at 2:49 pm
Rising rates of mental health disorders driven by the pandemic could cost the economy $7.4 billion, and that’s just in NSW.
Mental health and depressive issues among workers as a result of the COVID-19 pandemic could cost the NSW economy alone up to $7.4 billion by 2025.
During 2021, 21 per cent more people in NSW experienced mental helath issues, according to a report entitled Aftershock: Addressing the Economic and Social Costs of the Pandemic and Natural Disasters.
The Impact Economics and Policy report was commissioned by a raft of social peak bodies including the NSW Council of Social Service (NCOSS) and Mental Health Coordinating Council.
The economic loss estimate is based on reduced worker productivity, driven by higher rates of depression and anxiety.
See also: Helping manage workplace mental health
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. She also pointed out that the economic loss projected is conservative, because there were already significant economic and social costs associated with mental health before the COVID-19 pandemic, exacerbated by a spate of natural disasters.
“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,” Quilty said.
“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.”
CEO of Mental Health Coordinating Council Carmel Tebbutt also pointed out 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 disproportionately impacted people with a disability, due to lack of access to vaccines and interruptions in usual services and supports.”
The peak bodies are urging the NSW government to respond to the dire need through a range of targeted investments.