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BACKGROUND: Australia commenced a 5-year reform of mental health services in 1993. AIMS: To report on the changes to mental health services achieved by 1998. METHOD: Analysis of data from the Australian National Mental Health Report 2000 and an independent evaluation of the National Mental Health Strategy. RESULTS: Mental health expenditure increased 30% in real terms, with an 87% growth in community expenditures, a 38% increase in general hospitals and a 29% decrease in psychiatric hospitals. The growth in private psychiatry, averaging 6% annually prior to 1992, was reversed. Consumer and carer involvement in services increased. CONCLUSIONS: Major structural reform was achieved but there was limited evidence that these changes had been accompanied by improved service quality. The National Mental Health Strategy was renewed for another 5 years.
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