The Ministry of Health has rejected a plea for funding from Gumboot Friday, which provides free counselling for young people in New Zealand, according to Mike King.

King, the founder of Gumboot Friday, posted the news on social media this morning.

It comes two weeks after he returned his Order of Merit medal, saying the mental health system was "broken" and "no one is trying to fix it".

In his post this morning, King quoted mental health and addiction primary and community wellbeing manager Jo Chiplin, who emailed him yesterday to say: "We are not in a position to fund Gumboot Friday."

The post, directed at Prime Minister Jacinda Ardern, said: "The Ministry of Health sent Gumboot Friday a rejection email declining our plea for funding."

"I know this decision is out of your control and that you are genuinely doing your best to bring change. Despite this rejection we vow to continue fighting to fund free counselling for the kids MOH doesn't care about," he said on Facebook and Instagram.

King said the decision was a "truly sad day for all New Zealanders" and would have a "devastating" effect on Kiwi families who were already struggling to get help in an overrun mental health system.

Gumboot Friday had assured the ministry that 100 per cent of any funding received would go to counsellors with the organisation covering any administration costs, he said.

The Ministry of Health has been approached for comment.

This follows Health Minister Andrew Little's admission last month that he was "extraordinarily" frustrated at the slow pace of the roll out of the $1.9 billion mental health package the Government announced in 2019.

His comments came after revelations of acute mental health units running at capacity and reports only five extra acute mental health beds had been added as a result of the Government's investment.

National's mental health spokesperson Matt Doocey revealed just $500,000 of $235m set aside for new mental health facilities in Budget 2019 had been spent, or 0.2 per cent.

"I am still trying to understand why. I am not expecting facilities to be completed or fully staffed but we seem to be a long way behind actually getting a shovel in the ground," Little said.

"We made the decisions, commitments, the money is there but the design and execution is out of our hands."