Most ex-prisoners are unemployed or homeless six months after their release, and the results are worse for people with mental illnesses, an Australian study has found.

The University of Melbourne study interviewed 1,300 Queensland prisoners while incarcerated and then again three and six months after their release.

The study's lead author associate professor Stuart Kinner said the research was some of the first to look beyond the lifespan and rates of recidivism of ex-prisoners.

"This is the largest study in Australia and one of the largest in the world looking at what happens to people after they're released from prison.

"What we found is that they experienced a range of poor health and social outcomes across a whole lot of different domains," Professor Kinner said.

The number of prisoners in Australia topped 30,000 for the first time last year, according to the Australian Bureau of Statistics.

Of those prisoners, 58 per cent had served a previous sentence in jail.

The study said prisons have been referred to "as the mental health institutions of the 21st century" and almost half of the participants reported having been diagnosed with a mental health disorder.

Prisoners in Australia 30,775 prisoners (sentenced and unsentenced)

30,775 prisoners (sentenced and unsentenced) 92 per cent are males

92 per cent are males Median age: 33.9 M / 34.5 F

Median age: 33.9 M / 34.5 F 24 per cent on remand awaiting sentencing Source: ABS, Dec 2013

The most common disorders were anxiety, schizophrenia and substance use disorder.

Professor Kinner said unstable housing and homelessness, high rates of unemployment and a range of health problems were common among all people released from prison, but outcomes for ex-prisoners who had a history of mental health problems were significantly poorer.

"At one month post-release people with a history of a mental disorder were around three times as likely to be arrested," he said.

"They were, fortunately, more than three times as likely to have contacted a mental health service but also almost twice as likely to have markers for poor mental health.

"Those same people were twice as likely to be injecting drugs and at six months down the track twice as likely to be drinking in risky ways.

Governments need to be 'tough on the causes of crime'

Professor Kinner said that while efforts were already being made to improve health and well-being of prisoners while they were incarcerated, not enough was being done to assist with the transition back into the community.

"What we're arguing is that these data strongly support the view that we need to do more to support people after they're released from prison," he said.

"We need to do more generally for people transitioning out of prison; we need to do more particularly for people with a history of mental disorder."

He said in order to reduce spending on the justice and health systems, governments need to get "tough on the causes of crime".

"What we're talking about here is not replacing imprisonment. We're saying once people have finished their sentence, if we don't want them to return to prison we need to give them a genuine opportunity to reintegrate into society and the outcomes we're seeing here suggest that often that's not occurring," he said.

Professor Kinner said while it is difficult to convince the public to spend more money on convicted criminals, there were arguments to support it.

Seven offences account for 84 per cent of sentenced prisoners: Acts intended to cause injury: 17%

Acts intended to cause injury: 17% Sexual assault: 13%

Sexual assault: 13% Unlawful entry with intent: 13%

Unlawful entry with intent: 13% Illicit drug offences: 11%

Illicit drug offences: 11% Offences against justice procedures: 11%

Offences against justice procedures: 11% Homicide: 10%

Homicide: 10% Robbery and extortion: 10% Source: ABS, Dec 2013

"The first is a human rights argument: people released from prison are entitled to the same level of service as everybody else in the community and for anybody else showing the sort of outcome we're seeing here we would certainly feel an obligation to provide those services," he said.

"People with a history of mental disorder were twice as likely to be injecting drugs. We know that blood born viruses are common among people in prison and injecting drugs after returning to the community creates a risk of those infections spreading ... so we have a compelling public health argument.

"We know that people who have poorer health outcomes post-release are more likely to re-offend, so there's a compelling public safety argument.

"We also know that supporting people to transition from prison to the community is a lot cheaper than arresting, trying and re-incarcerating people ... so there's a compelling economic argument."

The Queensland Government says it is working hard to help prisoners transition back into normal life.

A statement from the office of Attorney General Jarrod Bleijie says the Government has spent $36.4 million this year on a number of "comprehensive reintegration programs" to assist prisoners in their "resettlement into society and to reduce recidivism".

It says the programs provide support both inside and outside prison and that the Government acknowledges the need to give returning prisoners "as much support as possible to turn their lives around".