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Queensland’s government has defended its $1.2 billion hypothecated mental health, alcohol and other drugs (MHAOD) levy after an auditor‑general review found significant governance and oversight failures.
The Queensland Audit Office report, published in late May 2026, found there was no system to check how levy revenue raised between January 2023 and June 2025 was being spent, that the levy’s scope and outcomes were not defined, and that decisions on funding were reactive rather than strategically planned.
The levy, collected via payroll tax (0.5% on payrolls above $10 million), has so far raised $1.2bn and is projected to raise around $500m more than originally forecast in its first five years.
More than 90% of revenue has gone to Queensland Health, largely funding the Better Care Together plan; some payments also went to other agencies, including disaster recovery and domestic violence initiatives.
Health Minister Tim Nicholls said the levy will not be cut, confirmed steps to identify where money is spent and measure effectiveness, and noted $350m has been directed to services deemed within scope.
Treasury has begun drafting clearer funding guidelines and the state mental health commissioner has backed the audit recommendations.
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The Sydney Morning HeraldHealth minister confirms there will be no cuts to mental health levy




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