Green Party MP Kevin Hague says New Zealand's mental health services are systemically failing, accusing the minister of entering "arse-covering mode".

A number of high-profile suicides in residential care and reports of underfunding have the Greens calling for nationwide inquiry into mental health services.

The party's health spokesman Kevin Hague has also called for the Mental Health Commission - disbanded by the Government in 2012 - to be reinstated.

He has released draft terms of reference for a nationwide inquiry, based on one by former judge Ken Mason which led to the establishment of the commission in 1996.



Hague said the incidents that lead to the Mason inquiry, "were nothing really, compared to what we're seeing now".



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His comments come after the recent release of inquiries into the deaths of Shaun Gray and Nicky Stevens, both of whom died while in the care of the mental health wards at Midcentral DHB and Waikato DHB respectively.



Gray's death was an apparent suicide, and just a month later 21-year-old Erica Hume died in similar circumstances in the same ward.

FAIRFAX NZ Health Minister Jonathan Coleman says with each case, the issue was "making sure this sort of thing doesn’t happen again", but mental health was an "incredibly complex" area of medicine.

The deaths sparked a damning external review of the DHB's mental health service and lead to a complete restructure of its management team. But Gray's family learnt in May, that no charges would be laid in relation to his death.

Stevens, who suffered from schizophrenia, was under a compulsory care order at the Henry Rongomau Bennett Centre (HBC) in Hamilton when he failed to return from an unsupervised 15 minute smoke break on March 9, 2015.

Three days later, the 21-year-old's body was found in the Waikato River. No DHB inquiry has taken place.

Hague said in each cases, inpatient services were so strained that staff could not adequately carry out their jobs.

"And so you see lapses in the basic standard of care, reduced staff morale, and then things going catastrophically wrong.

"At which point, the system - both the DHB and the Minister - other than looking into what has gone wrong here, how we can prevent this happening again, instead going into arse-covering mode."

That a DHB inquiry had not been carried out into Stevens death yet, "beggars belief".

Health Minister Jonathan Coleman and an entourage of Health Ministry Officials fronted to Parliament's Health Select Committee this week.

Under questioning from Hague, Director and Chief Advisor of Mental Health Dr John Crawshaw said the police investigation was drawing to a close but that was given greater priority.

"In this case it became very clear that the interviews that the police needed to make of the staff, would mean that it would be very difficult for us to also speak to the same staff at the same time, without prejudicing the police investigation," he said.

Coleman defended mental health services, saying the branch of medicine was "incredibly complex".

"You're reliant on talking to patients, and it's the skills of the clinicians which leads them to conclusions. So it's not a linear branch of medicine in the sense of the diagnostics elements, it's extremely difficult."

He said mental health service provision had changed to having a greater emphasis on treatment within the community, and both demand and access for assessments had increased.

But at the same time admitted overall hospital beds had declined. Figures released to Stuff show there were 738.3 adult inpatient beds across all 20 DHBs during the year up to June 30 2015.

That was down from 740.6 two years prior.

Hague said an inquiry needed to be held urgently, which looked into whether ringfenced funding for mental health was actually being used for that, and a complete review of the funding provision and co-ordination of services.

His draft terms of reference also include a review of workforce issues, "particularly professional retention", and complete "stocktake of the sector following the disestablishment of the Mental Health Commission".

Former Health Minister Tony Ryall disestablished the Commission, transferring its functions to the Office of the Health and Disability Commissioner with Mental Health Commissioner working within that agency.

Up until then the Mental Health System was improving, Hague said.

"There was a system that was able to consistently and systematically improve, but since the Commission has gone and the targets and goals have also disappeared, we're back to the old 'out of sight out of mind' days where DHBs who are under financial pressure can afford to de-prioritise mental health services."