The federal government says it is spending more than ever before on mental health services but admits it can do better.
Mental Health Minister Mark Butler said the National Mental Health Report 2010 showed total mental health spending by governments and private insurers rose by 10 per cent in real terms to $5.32 billion.

The report incorporates data for 2007-08, covering the final period of the former government and the first seven months of Labor.

Mr Butler said this 10 per cent increase was the largest since the National Mental Health Strategy began in 1993.

He said the federal government had made significant investments in mental health services, nearly tripling funding to $1.4 billion to specific mental health programs over the next three years.

'We know however there is more to do,' he said in a statement.

'We will be taking into account the lessons that have been learned from the previous National Mental Health Plans, and we intend to do better.'

The report says total federal and state government spending on mental health increased by 137 per cent between 1993 and 2008.

Australian government spending increased by 201 per cent, equivalent to $1.3 billion, while state and territory government spending increased by 110 per cent, or $1.7 billion.

Mr Butler said the report showed the number of hospital beds for mental health patients increased by eight per cent from 2003 to 2008, reversing the steady decline of the previous 10 years.

Growth of the clinical mental health workforce accelerated between 2003 and 2008, he said.