Mental illness is costing the Australian economy $60 billion every year with a toll of lost wages and reduced productivity eating into company bottom lines, according to a report out today.

Key points: Mental illness affects one in five Australians

Mental illness affects one in five Australians Mental illness's direct cost to business is estimated to be $13b a year, according to new research from the Shared Value Project

Mental illness's direct cost to business is estimated to be $13b a year, according to new research from the Shared Value Project Mental health royal commissioner Professor Allan Fels says business will improve productivity by dealing more proactively with the issue

Research released ahead of World Mental Health Day by the not-for-profit Shared Value Project suggests the $13 billion cost each year to business alone should be triggering alarm in corporate boardrooms.

Professor Allan Fels, a commissioner with the royal commission into Victoria's mental health system, said while awareness in the business sector had improved in recent years, there was an urgent need to do more.

"Business should be very proactive these days and I think that's starting to be recognised fairly widely in corporate Australia, partly because it is directly in their own profit interests. It is also in the community interest," Professor Fels told the ABC's AM program.

"There is still a considerable way to go, but it is much more on the map. Mental illness can be associated with absenteeism but also so-called presenteeism.

"That's because people come to work but they are not productive because they are depressed or anxious. Something can and should be done about that."

A former Australian Competition and Consumer Commission (ACCC) chairman, Professor Fels said mental illness affected one in five Australians and was likely to add to Australia's weakening economic growth.

Community challenge

Professor Fels said his experience as the parent of a daughter with schizophrenia had helped him better understand the mental health challenges confronting individuals and employers.

"There's nothing like having personal or family experience of mental illness to see what a devastating effect it can have on a life of an individual, on their families, and on people working with them," Professor Fels said.

"That has prepared me to look at the extent of the challenges the community faces over mental health and that's what the royal commission is about. It is like physical illness; it needs to be treated, it can be treated."

Professor Fels said while company boards and chief executives now took mental health issues more seriously, the concern needed to go beyond corporate social responsibility policies.

He added while last year's financial services royal commission exposed a range of misconduct, mental health issues in the background could have had a higher profile.

"If people have better mental health and better mental wellbeing, I think they'll treat their customers better," Professor Fels said.

Professor Fels also backed calls for the ACCC to take greater oversight of banking, which could include a new inquiry into bank misconduct.

"Yes. There was a lot of unfinished business. Many problems remain with banking and also the financial services lobby is working really hard to weaken the impact of Hayne and it needs to be kept right in front of the public."

The Shared Value Project research on mental illness and the economic impact is being launched in Melbourne today.

Follow Peter Ryan on Twitter @peter_f_ryan