The state's peak body for community managed mental health services says more needs to be done to address the needs of patients, before they require treatment at a hospital.
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The 2019-20 state budget delivered no additional investment for community mental health services.
Instead it continued existing commitments, including 27 mental health beds for the state's South and a mental health unit as part of the $87 million Launceston General Hospital redevelopment, due for completion in 2024.
There's also $6.5 million in 2019-20 to continue the Tasmanian Community Health Fund, to support statewide preventative health initiatives.
However, Mental Health Council of Tasmania chief executive Connie Digolis said considering increased demand, it was not the time to overlook opportunities to improve service delivery and access.
"We cannot deny the urgent and immediate need to alleviate the pressures on our hospitals," she said.
"However, we must not lose sight of the bigger picture that, in every sense, prevention initiatives will save money and, more importantly, save lives.
"We should be addressing the needs of people with mental health concerns earlier, to stop this cycle of people arriving at hospital because they had no other viable alternative."
In his budget speech, Treasurer Peter Gutwein said mental health was a "key priority" of the government.
Speaking at Friday's Tasmanian Chamber of Commerce state budget briefing in Launceston, Health Minister Michael Ferguson said the government was committed to working closely with communities on preventative health issues.
"We, across government, actually invest around $70 million right now ... on working with the community on health," he said.
"But, we are trying to be more strategic and essentially working at the grassroots with local community. We will have a lot more to say on this, in this calendar year."