A report into trauma and young people has found existing mental health services are not able to meet the needs of youths with trauma.

Australia's existing mental health services are failing to effectively help traumatised youth, a new report has found.

The report into trauma and young people called on the Australian government to create a national policy response - with actions and activities to implement evidence-based trauma responses within health and human services.

It also recommends the development and subsequent trial of an assessment tool to identify the presence or impact of trauma on young people.

The federal government is also urged to develop a targeted primary mental health care package for youth with complex trauma-related mental ill health - which includes boosting the number of therapy sessions covered under Medicare from 10.

The report also recommends boosting the number of mental health and health service professionals.

Orygen and Phoenix Australia have co-authored the report.

The report also calls for government, services and young people to work together to develop better identification, assessment, support and treatment of trauma within the mental health system.

Phoenix Australia deputy director Associate Professor Andrea Phelp said using "trauma-informed care" which promotes a sense of safety and trust was not an effective trauma treatment.

"We need a research agenda for trauma and young people funded by the Australian government, that looks not only at trauma-informed care but at trauma treatments for young people who have been exposed to trauma," she said.

"Unfortunately, trauma is a part of life for many young people so our focus really needs to be on setting up service systems that provide a safe place where young people are prepared to disclose trauma, and a workforce that has the skills and capability to respond effectively and promote recovery."

Orygen lead trauma researcher Sarah Bendall said international studies showed up to two-thirds of youth had been exposed to at least one traumatic event by the age of 16.

"The likelihood of having experienced trauma is much higher in young people who have been in contact with the justice system, in the care of family and human services, from refugee backgrounds, those working in our armed forces or emergency services, or young Aboriginal and Torres Strait Islanders," Dr Bendall said.

She said many youths found it hard to share trauma - including sexual and physical assault - to health professionals as they often felt embarrassed.