'Unfair criteria' shutting mental health groups out of government funding - Labour

Community mental health groups are being shut out of applying for government funding due to "unfair criteria", the Labour Party says.

The opposition's mental health spokesperson, Ingrid Leary, said few grassroots organisations would be eligible to apply for the new Mental Health Innovation Fund.

Tender documents showed applicants were required to have $250,000 co-funding, she said.

"It's outrageous to suggest community mental health groups have hundreds of thousands of dollars sloshing around in their bank accounts."

Others in the sector have pointed out the fund's narrow criteria - including the requirement to produce "social return on investment" analysis and "scaleable" digital innovation - meant only larger organisations (with more than 80 staff) would have the capacity to absorb costs and fulfil all the compliance requirements.

"It shows that this minister is completely out of touch, favouring large organisations that can absorb costs, or he is once again pre-empting the outcome as he did with the Gumboot Friday procurement, and picking winners," Leary said.

The government was widely criticised for giving the Mike King counselling service $24 million over four years in the Budget without a contestable procurement process.

The Budget also set $10m over two years for the innovation fund, which was half of the $20m promised by the National Party prior to the election.

Mental Health Minister Matt Doocey said Leary was "spreading misinformation" and criticising an initiative that would allow organisations "to scale up" to help support the mental health and addiction workforce.

"While in government, Labour announced many initiatives but delivered on very few.

"The Mental Health and Community Sector Innovation Fund is a reallocation of uncommitted funds that were stuck in Wellington and instead given to grassroots community organisations around the country."

Contrary to Leary's claims, there was "no requirement to have a minimum of 80 staff in the Health NZ tender documents", he said.

"The Mental Health and Addiction Innovation Fund is not the only initiative this government has in place to support the mental health workforce and is one initiative that is a part of a wider plan.

"It is important to note the Mental Health Community Sector Innovation Fund RFP [Request For Proposal] has been published and have now moved into a contestable tender process. This process is fair and transparent, and all potential applicants have access to the same information."