Health equity in NSW: the system we have isn't built for the people it's failing

NSW has one of the strongest health systems in the country, yet where you live, who you are and what you earn still shape how long you live and how well. Equity is often treated as a values question, something to pursue once the budget allows. That is wrong. It is a sustainability and productivity issue, and it grows more pressing every year.

How unequal are we, and why does it matter now?

Mental health shows how uneven access is. Only 45.1 per cent of Australians with a mental disorder in the past year saw a health professional for it.^[1] Geography matters too. Major cities receive more than three times as many Medicare-subsidised mental health services as remote areas: 507 per 1,000 residents, compared with 156.^[2] The gaps also show in how long people live: First Nations males born in 2020–22 can expect to live 8.8 years less than non-Indigenous males, and females 8.1 years less.^[3] 

The gaps appear early. In the 2024 Australian Early Development Census, 23.5 per cent of children began school developmentally vulnerable on one or more domains, up from 22 per cent in 2021.^[4] Nationally, children in very remote areas are twice as likely to be vulnerable as those in major cities. More than 40 per cent of Aboriginal and Torres Strait Islander children remain vulnerable despite progress, and the figure for children from linguistically diverse backgrounds has risen to 27.4 per cent. Investment in secondary care won’t close these gaps. It takes a response that spans health, education and community care and combines universal and targeted approaches.

It is urgent because the population is growing and diversifying, outcomes for priority groups aren’t improving, and the system is under funding strain and ever harder to navigate.

Inequity is built in, not about individuals

Racism, geography, cost and a lack of culturally safe care create barriers long before anyone reaches a clinician, and funding models, governance and incentives reinforce them. The system is organised around diagnosis and treatment and weighted towards acute care. In child mental health, roughly three-quarters of funding goes to acute and severe presentations, even though half of all mental health conditions emerge before age 14. People with overlapping needs, such as chronic illness alongside housing insecurity or trauma, fit no funded pathway.

Two approaches with strong evidence

The first is consumer-led design and delivery, with people who use services as genuine partners. It surfaces barriers planners can’t see and builds the trust that drives engagement. Flourish Australia grew its peer workforce almost 600 per cent in 18 months,^[5] and peer workers now make up 42 per cent of its frontline staff.

The second is integrating services around people’s needs rather than eligibility criteria. The Medicare Mental Health Kids Hubs are a good test case: free for children aged 0–12, with no diagnosis or referral required. Nous Group’s evaluation found they reach families the system often serves poorly. More than a quarter face co-occurring vulnerabilities such as family violence or housing instability, and almost half need multiple services. Families reported very high satisfaction, and hubs that sustained co-design and built Aboriginal-led partnerships saw stronger engagement.^[6] 

Why is this so hard to do?

Because these models run against the grain of the system. Funding sits in departmental silos, so no one holds the budget for outcomes that cross health, education and community services. Activity-based funding rewards hospital volume over community prevention. Governance rarely gives consumers real decision-making power, and even the Kids Hubs reported delays from short funding horizons and rigid financial rules.^[7]  Pilots succeed, then stall, because the structures around them don’t change.

Where NSW and Australia are showing the way

Western NSW shows what partnership looks like at scale. It is the state’s largest local health district by area, bigger than Victoria, and First Nations people make up 14.5 per cent of its population.^[8] Its Waluwin integrated care strategy was built on a partnership between the district, the Western Primary Health Network and the Bila Muuji collective of Aboriginal Medical Services.^[9] 

The biggest policy opportunity is Thriving Kids: $4 billion over five years for supports outside the NDIS for children aged 8 and under with developmental delay and/or autism, with services starting in October 2026.^[10] Its “no wrong door” approach, with no diagnosis needed, is the design principle equity demands.

But the opportunity isn’t guaranteed. A no-wrong-door promise is only as good as the eligibility rules, assessment tools, workforce and governance behind it. If those reproduce old diagnostic gatekeeping, the system will keep failing the same families under a new name.

[1] Australian Bureau of Statistics (2023), National Study of Mental Health and Wellbeing 2020–22, media release, 5 October 2023: https://www.abs.gov.au/media-centre/media-releases/two-five-australians-have-experienced-mental-disorder

[2] National Mental Health Commission (2025), National Report Card 2025 https://www.mentalhealthcommission.gov.au/sites/default/files/2026-08/national-report-card-2025---key-findings-infographic.pdf.

[3] Productivity Commission, Closing the Gap Information Repository, Outcome area 1 https://www.pc.gov.au/closing-the-gap-data/dashboard/outcome-area/long-and-healthy-lives

[4] Australian Early Development Census (2024 AEDC): https://www.education.gov.au/early-childhood/early-childhood-data-and-reports/australian-early-development-census-aedc

[5] Flourish Australia (2017), “Why not a peer worker?”, Mental Health and Social Inclusion

[6] Nous Group (2026), Evaluation of the Medicare Mental Health Kids Hubs Initiative: Final Report (see note 9): hubs free for children aged 0–12 with no diagnosis or referral required; co-occurring vulnerabilities; family satisfaction; co-design and Aboriginal-led partnerships.

[7] Nous Group (2026), Evaluation of the Medicare Mental Health Kids Hubs Initiative: Final Report

[8] NSW Government, Western NSW Local Health District https://www.nsw.gov.au/departments-and-agencies/wnswlhd/about-us/western-nsw-lhd-strategies-plans-and-reports/wnswlhd-year-review

[9] Waluwin integrated care strategy, Western NSW Local Health District, Western NSW Primary Health Network and Bila Muuji, International Journal of Integrated Care, doi:10.5334/ijic.2839. https://refworks.reference-global.com/article/10.5334/ijic.2839

[10] National Disability Insurance Agency, https://ndis.gov.au/news/11085-thriving-kids