Beyond diagnosis: building a mental health system that works

Against this background, the government’s new Thriving Kids proposal is more than a budget repair job. It is an attempt to replace diagnosis-driven rationing with function-based support. Funds would be directed toward needs, not labels. That shift should be welcomed—but only if it avoids the mistakes of the past.

Merely rebadging services without changing incentives will not work. If providers are still paid per therapy session, the treadmill of overservicing will continue. If families still perceive diagnosis as the golden ticket, demand for labels will persist.

What’s needed is a true functional model: support tied to what a child can or cannot do, not to what label a psychiatrist or paediatrician writes on a form. Schools, health clinics, and community services should provide foundational help without requiring a psychiatric certificate. When children improve, supports should taper. When they fall behind, help should flow quickly—without the Kafkaesque wait for a diagnosis.

And this is not just an Australian issue. From the United States to Scandinavia, diagnosis-based systems face the same trap: categories expand without limit, costs spiral, and incentives reward the appearance of illness rather than the pursuit of recovery.

The NDIS was born out of compassion. Its survival depends on hard-headed realism: diagnosis should not be the price of care, nor should labels become lifelong shackles. If a new program can break that cycle, it will not only save the scheme, it will save our children.