New Zealand is experiencing a rising tide of mental distress and addiction and it is not a problem that is going to be fixed by the Government or the health system alone, a wide-ranging report into New Zealand's mental health system has concluded.

Among its recommendations are urgently implementing a national suicide prevention strategy, reforming the Mental Health Act and establishing a new Mental Health and Wellbeing Commission to act as a watchdog.

The long-awaited Report of the Government Inquiry to Mental Health and Addiction is the most comprehensive report into the area since the 1996 Mason report.

The inquiry, led by former Health and Disability Commissioner Ron Paterson, received 5200 submissions and canvassed a range of information.

The report, released today, said that despite access to costly biomedical treatment, something central to recovery appeared to be missing in the social fabric of developed countries.

"The cost of poor mental wellbeing and addiction is high. It is a high cost to individuals, families and whānau, businesses and organisations, communities, government and the country as a whole."

Clear links exist between social deprivation, trauma, exclusion and increasing levels of mental distress. Our wellbeing is being further undermined by aspects of modern life, such as loss of community, isolation and loneliness.

The report, which has made 40 recommendations, said New Zealand could not medicate or treat its way out of the epidemic of mental distress and addiction affecting all layers of society.

"We need to ensure practical help and support in the community are available when people need it, and government has a key role to play here. But some solutions lie in our own hands. We can do more to help each other."

The report said there was a strong foundation to create a mental health and addiction system.

"Many people in the system receive good care and we have a skilled and committed workforce. But the system is under pressure and unsustainable in its current form. Signs include escalating demand for specialist services, limited support for people in the community and difficulties recruiting and retaining staff.

Despite the current level of investment in mental health ($1.4 billion in 2016/17), New Zealand was not getting the outcomes it wanted for its people.

The outcomes for Māori were worse than for the overall population, and Māori were subject to much greater use of compulsory treatment and seclusion. There are also unmet mental health needs for Pacific peoples, disabled people, Rainbow communities, the prison population and refugees and migrants.

The estimated reduction in life expectancy of people with severe mental health or addiction challenges was 25 years and the persistently high suicide rates were of major concern.

"Our mental health system is set up to respond to people with a diagnosed mental illness. It does not respond well to other people who are seriously distressed. Even when it responds to people with a mental illness, it does so through too narrow a lens. People may be offered medication, but not other appropriate support and therapies to recover. The quality of services and facilities is variable. Too many people are treated with a lack of dignity, respect and empathy."

The report said it was not simply calling for more money for mental health and addiction services, although it was clear further investment was required in Budget 2019 and beyond, but a whole new approach was needed.

"The changes we have recommended … are intended to transform our approach to mental health and addiction. Change will take time. It must be sustained over a long period but we need to start now."

The 40 recommendations fell into 10 broad actions.

They include the urgent completion and implementation of a national suicide prevention strategy, with a target of 20 per cent reduction by 2030.

"New Zealand's persistently high suicide rates were one of the catalysts for this inquiry. Suicide affects people of all ages and from all walks of life, with thousands of New Zealanders touched by suicide every year," the report said.

The report also recommended repealing and replacing the Mental Health (Compulsory Assessment and Treatment) Act to reflect a human rights approach.

"The Mental Health Act is out of date, inconsistent with New Zealand's international treaty obligations and sometimes results in trauma and harm to compulsorily treated patients."

A new Mental Health and Wellbeing Commission should be set up to act as a watchdog and provide leadership and oversight. It should publicly report on progress in mental health and addiction, including on the implementation of the Government response to the inquiry's recommendations.

The report said there should be a stricter regulatory approach to the sale and supply of alcohol, and criminal sanctions for the possession of controlled drugs for personal use should be replaced with civil responses, supported by a full range of treatment and detox services.

The Government will formally respond to the report's findings by March next year.

Today Health Minister David Clark said the inquiry was a "once-in-a-generation opportunity to rethink how we handle some of the biggest challenges we face as a country".

"The report charts a new direction for mental health and addiction in New Zealand, one that puts people at the centre of our approach.

"It is clear we need to do more to support people as they deal with these issues - and do a lot more to intervene earlier and support wellbeing in our communities," Clark said in a statement.

But he warned that many of the issues, such as workforce shortages, would take years to fix.