The report, compiled by the Productivity Commission and released on Thursday, sheds new light on the depth of the problem of mental illness in Australia, revealing as many as 3.9 million many people suffer from complaints ranging from anxiety and depression, to psychosis and personality disorders.

One in eight visits to the GP (general practitioners) are now related to mental health issues, and mental health presentations at hospital emergency departments have risen by about 70 percent over the past 15 years, the report said.

It estimated there were 3.9 million people in Australia suffering from some form of mental illness, but only 2.9 million were accessing support and services, hence the "missing" million people.

In its detailed examination of mental illness, the commission found it was costing the nation approximately 345 million U.S. dollars a day, and recommended thorough policy amendments in the health system, as well as workplaces, housing and the justice system.

The report emphasises the need for better support for young people.

Productivity Commission Chair Michael Brennan said in a media release, "75 percent of those who develop mental illness first experience symptoms before they turn 25, and mental ill-health in critical schooling and employment years has long lasting effects for not only your job prospects but many aspects of your life. Getting help early is key to prevention and better outcomes."

According to the report, over their lifetime, one in two Australians will be affected by mental ill-health including anxiety and depression and up to a million people don't get the help they need.

"Mental ill-health has huge impacts on people, communities and our economy but mental health is treated as an add-on to the physical health system. This has to change," Brennan said.