People with mental illness will have easier access to well-staffed services in NSW as a report highlights widespread failings in the state's support for those in need.

The $111 million budget boost for mental-health spending follows the stabbing rampage at a Sydney shopping centre in which a man with a reported history of schizophrenia killed six people.

Community mental health teams will receive funding for an additional 35 staff, allowing for better case management and extended hours to provide outreach, including in regional areas, the state government announced on Tuesday.

Patients will be better connected to services through a "front door" model aimed at providing quicker care amid record-high emergency department attendances.

The extra funding was an important step in providing increased care, Premier Chris Minns said.

"Our profound hope is that it does make a difference in someone's life," he said.

NSW Premier Chris Minns speaks to the media (file)
Chris Minns says mental health services are a vital lifeline. (Bianca De Marchi/AAP PHOTOS)
The severity of cracks in NSW mental-health services were highlighted in April after the stabbing attack at Bondi Junction, where Joel Cauchi, a 40-year-old man with a history of mental illness, was also shot dead.

An extra $18 million has been allocated for a coronial inquiry into the massacre that will also focus on the adequacy of NSW's mental health care.

"The recent tragic events, terrible events across Sydney, really do highlight ... that this is essential funding," Mr Minns said.

The premier said the scale of the problem was large and the government response could not capture all circumstances or eventualities.

People with persistent mental illness and complex needs will have support from 25 additional staff providing alternatives to long-term hospital care under a program worth $40 million over four years.

People needing mental health support will be able to access assessment advice from specialist clinicians and be connected to relevant services with $39 million over four years aimed at keeping people out of emergency departments.

There were 124,467 mental health-related visits to NSW emergency departments in 2023, but about a quarter of those presentations could have received support through other primary care settings, the government said.

Mental-health liaisons will also be enlisted to conduct outreach for people at risk of or experiencing homelessness in order to connect them with services and accommodation.

Mental Health Minister Rose Jackson said people with complex issues already found it difficult to find and keep housing.

"When we ask them to do that without support, it fails, their tenancies fail, they end up in our hospitals, they end up in our prisons," she said.

The funding announcement comes ahead of the state budget later in June and coincides with the release of a parliamentary inquiry into the accessibility and delivery of mental health care.

NSW spends $2.7 billion annually on mental health, about half the budget of the state's police force.

The inquiry found there were significant barriers to accessing care in a fragmented and inadequately funded system.

It recommended whole-of-government reform to address social contributors to mental illness as well as better pay, conditions and training for workers.

Inadequate funding was creating and compounding multiple issues within the system, the inquiry reported.

Greens MP and inquiry chair Amanda Cohn said it was clear the state's mental-health system was "reactive and crisis-driven" and was letting down people seeking help, carers and those working in the sector.

"This report confirms what advocates have been saying for a long time - the system is chronically underfunded and on the brink of collapse," she said.