Psychology shortfall set to nearly double by 2038

Source: healthservicesdaily.com.au

TL;DR

The story at a glance

Federal modelling by the Department of Health, Disability and Ageing shows Australia's psychology workforce in health settings will face deepening shortages from 2025 to 2038. Supply is projected to rise 34% nationally to 45,765 FTE psychologists, but health demand will climb faster to 32,057 FTE under baseline scenarios. The analysis, released in April 2026, highlights risks to mental health services amid ageing workforce trends and training bottlenecks.[[1]](https://hwd.health.gov.au/resources/primary/psychology-compendium-report-april-2026.pdf)

Key points

Details and context

The study uses 2018-2023 data to model FTE (38 hours/week over 46 weeks) at SA4 geography, distinguishing baseline health demand from unmet needs including community mental health care. Supply factors in entries, exits (temporary/permanent), and hours; demand ties to Medicare items, hospital data, and population ageing.[[1]](https://hwd.health.gov.au/resources/primary/psychology-compendium-report-april-2026.pdf)[[3]](https://hwd.health.gov.au/resources/primary/psychology-supply-and-demand-model-methodology-paper.pdf)

Workforce ageing limits growth, with trainees dropping proportionally amid training pathway constraints like supervision shortages. This aligns with the National Mental Health Workforce Strategy 2022-2032, which flags psychologists as a priority shortage area.[[1]](https://hwd.health.gov.au/resources/primary/psychology-compendium-report-april-2026.pdf)

Projections assume steady new entries but warn demand surges from rising mental health prevalence could worsen gaps without reforms.[[2]](https://www.aapi.org.au/common/Uploaded%20files/AAPi/260414_Psychology%20Workforce%20Study.pdf)

Key quotes

"Projections indicate a 57.3% undersupply of psychologists in 2025, widening to an alarming 96.6% by 2038."[[2]](https://www.aapi.org.au/common/Uploaded%20files/AAPi/260414_Psychology%20Workforce%20Study.pdf)

"Demand projections for psychologists within health settings indicate a persistent workforce shortage throughout this period."[[1]](https://hwd.health.gov.au/resources/primary/psychology-compendium-report-april-2026.pdf)

Why it matters

Persistent shortages threaten equitable mental health care access, especially in rural areas and amid rising demand from population ageing and post-pandemic needs. Patients face longer waits for services like Better Access sessions, while states like NT and SA hit crisis levels now. Watch for government responses via training reforms or incentives, though sustained funding and pipeline fixes remain uncertain.[[1]](https://hwd.health.gov.au/resources/primary/psychology-compendium-report-april-2026.pdf)