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One can understand how a system operates by seeing where the money goes. The 1996 National Mental Health Report identifies recurrent spending on mental health services in 1995/96 (Figure 1-1). Two billion dollars were expended, about 5% of the total health expenditure, a proportion of the health budget which is probably lower than that of comparable developed countries, which makes the adequacy of existing services all the more remarkable. Fifty eight percent of the budget is spent by the States and Territories on community services, stand-alone psychiatric and general hospital psychiatric units. Australia is leading the way to ambulatory care for people with mental disorders, with 36 public beds and 8 private beds per 100,000 population, and a well developed community mental health service, complemented by ambulatory services provided by general practitioners and salaried or private psychiatrists.