There is an “inhumane” lack of support for mentally ill Australians, according to the head of a government-appointed commission.

The biggest problems include a lack of treatment and family support, which leads to hardship and an over-representation of mentally ill people in prisons.

“We speak about Australia as the `lucky country’, but mental health is a weak point,” said Professor Allan Fels, chair of the National Mental Health Commission.

More than four in 10 Australians will have a mental health problem in their lifetime and a cohesive approach is needed to help them, Prof Fels said at the release of the second national report card on mental health and suicide prevention in Sydney on Wednesday.

He said a “scandalous” example of the problem was a lack of treatment for people who had both mental health and substance problems.

This led to reduced life expectancy, suicide and unnecessary jail time.

About 40 per cent of the prison population had a mental illness and in NSW, for example, almost nine out of ten people in the juvenile justice system had at least one psychological disorder.

“The warehousing of people with mental health and drug and alcohol problems is inhumane and makes no economic sense,” he said.

“Each person with a mental health problem or a cognitive impairment who comes into frequent contact with the justice system costs taxpayers $1 million each year.”

He said about 44 Australians each year took their own life, but only 25 per cent of young people and 15 per cent of boys and young men with mental health problems received treatment of any kind.

Aboriginal and Torres Strait Islander people are twice as likely to die by suicide than non-Indigenous people, he said.

“There is a growing divide between those of us who are empowered to live a contributing life and those of us who are disempowered by issues like unemployment, homelessness, social exclusion, as well as a lack of the right support,” Prof Fels said.

There was a need for courage to resist tinkering with the disjointed system, instead of all levels of government working with public and private services to create a cohesive new system.