Using a census-based prevalence survey (Jablensky et al, 2000), we estimated the cost of psychosis in urban Australia at AU$2.25 billion (£0.86 billion) per year when valued at prices pertaining in the year 2000 (Carr et al, 2003). About 40% of these costs were spent on direct mental health care, the remainder being the costs of lost productivity (limited to unemployment in our study). The total costs amounted to AU$46 200 (£17 722) per person per year, 20% higher than the average annual male income. The bulk of the treatment cost was accounted for by in-patient care, which appeared to have become the default option in the absence of adequate levels of supported community accommodation. This was indicated by the fact that after ‘non-discretionary’ treatment costs (42% of direct costs) were accounted for (i.e. visits to a general practitioner, medication, crisis or emergency care, acute hospitalisation), almost three-quarters of the remainder was spent on long-stay hospitalisation (Neil et al, 2003). When patterns of community-based service delivery were examined, we found a marked paucity of delivery of psychosocial treatments, rehabilitation and substance use interventions, reflecting the skewing of expenditure towards long-term hospitalisation and away from community care.