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NSW mental health services will get a boost with additional staff and a budget outlay of AU$111 million, the state government announced on Tuesday.

Community mental health panels will recruit more staff to manage additional cases and involve in outreach programs, including in regional areas, AAP reported. The announcement by the NSW government was made based on the recommendations by a parliamentary inquiry on mental health care in NSW.

NSW Greens MP Amanda Cohn, who chaired the parliamentary inquiry, stated that finding more staff was not easy and that the lack of funds created barriers in accessing mental health care.

"Those services have sweeping vacancies across NSW, those positions can't be filled because the pay and conditions for health workers aren't acceptable," she said.

Health Minister Ryan Park responded to Cohn's comments, saying the state government was working on a comprehensive plan that will cover multiple portfolios.

The need for a revamp was felt when the police handling of mental health emergencies came under scrutiny.

In April, Joel Cauchi, a 40-year-old, stabbed six persons killing all of them at Westfield Bondi Junction shopping mall. Cauchi, with a history of mental health illness, was shot dead by the police. Between May and September last year, the police fatally shot or wounded four persons diagnosed with mental illness.

A parliamentary inquiry into mental health care across NSW recommended improved mental health training for police officers and exploring options of them to become second responders in such health crises, The Guardian reported.

Police responses in recent tragedies led to distress situations discouraging people from seeking police help in emergency situations. People experienced "psychological fear" leading to "fear and reluctance" among them from approaching the police, the report said.

The report stated that mental health care in NSW had become "reactive and crisis-driven" as it was "chronically and severely" underfunded.

Responding to the lack of funding in the sector, Premier Chris Minns said the government was doing its best.

Mental Health Coordinating Council chief executive Evelyne Tadros said the announced changes "fell significantly short."

"This doesn't go anywhere near far enough to address any of the recommendations," she said. "It feels like business as usual."