Universities in an Australian state should “step up” to embrace the opportunities afforded by a new mental health services levy rather than grumbling about the cost, a forum has heard.

Universities were blindsided by this month’s Victorian budget announcement of a payroll tax surcharge to finance an extra A$3.8 billion (£2.1 billion) in mental health spending. Victorian employers with salary bills over A$10 million a year face a 0.5 per cent levy, with an additional 0.5 per cent for those with payrolls exceeding A$100 million.

This will cost Melbourne and Monash universities upwards of A$11 million each annually, if the state parliament approves the measure.

Universities had expected their charitable status to exempt them from the levy, which was a key recommendation of a recent royal commission. “We already spend a great deal of money doing so much work in mental health,” said Melbourne’s Duncan Maskell, who chairs the Victorian Vice-Chancellors Committee.

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“We are seeking an urgent conversation with government to understand the rationale for this and to ensure that all relevant information is with the government prior to this policy being put before parliament.”

Victorian universities are already battling the financial fallout of Covid-19, with four institutions registering deficits last year. But high-profile psychiatry professor Ian Hickie said universities should treat the levy as an opportunity for “collective self-help”.

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He told the  that interest in student welfare had been “led by students” and universities had taken “about a decade” to catch up. “We see young people as physically fit and healthy – prime of their life – but, actually, they’re at considerable risk,” said Professor Hickie, who co-directs the University of Sydney’s Brain and Mind Centre.

Recommendations to improve student mental health “have sat around for a long time”, he added. “Institutions…need to respond properly to the opportunities that may attract further government support.”

Student mental health advocate Ben Veness said the royal commission had given the sector a chance to “piggyback” on the political appetite for mental health system reform. Universities, as places where young people congregated with counsellors, teachers and peers, had “a good opportunity to access young people while they’re still in the tail end of their developmental trajectory”.

A former president of the Australian Medical Students’ Association, Dr Veness won a 2013 Churchill fellowship to explore student mental health. He said it was time to implement recommendations from his 2016 report, such as establishing an external accreditation and support scheme modelled on the  programme in the US or the  in the UK.

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Such an initiative would give universities a “yardstick” on their progress and advice about further measures. “We’ve tried leaving it up to the universities for a really long time now, and they’re struggling,” Dr Veness said.

The conference coincided with the announcement of a snap seven-day lockdown in Victoria following a new Covid outbreak. Panellists stressed the need for students to stay “connected” and for universities to treat mental health as core business, through things such as curriculum design.

“If mental well-being is seen as an extra – an extra workshop to attend or a special day on campus – the students who need it most might not have the time to do the extras,” said Curtin University equity researcher Nicole Crawford.

john.ross@timeshighereducation.com