The Inquiry into Mental Health and Addiction is recommending the government set up a Mental Health and Wellbeing Commission, take strong action on alcohol and other drugs and set a target to reduce suicide rates.
The panel, led by the former health watchdog Ron Paterson, spent roughly 10 months consulting people around the country, holding more than 400 meetings and considering about 5000 submissions.
It delivered a 200-page report and 40 recommendations to Health Minister David Clark who has released it today.
The recommendations include taking strong action on drugs by enacting a stricter regulatory approach to the sale and supply of alcohol and replacing criminal sanctions for the possession for personal use of controlled drugs, with civil responses.
It also calls for the government to urgently complete and implement a national suicide prevention strategy, with a target of a 20 percent reduction in suicide rates by 2030.
The inquiry's report says the Mental Health Act is out of date and inconsistent with New Zealand's international treaty obligations, saying it should be repealed and replaced with law that reflects a human rights approach and minimises compulsory or coercive treatment.
It also suggests the establishment of new Mental Health and Wellbeing Commission to act as a watchdog and provide leadership and oversight of mental health and wellbeing in New Zealand.
It says there has been a general lack of confidence in leadership of the mental health and addiction sector over many years, since disestablishment of the original Mental Health Commission, and new Commission is needed to provide system leadership and act as the institutional mechanism to hold decisionmakers and successive governments to account.
Dr Clark said the government would consider the recommendations carefully.
"The Inquiry panel has delivered a set of strong and coherent recommendations covering everything from the social determinants of health and wellbeing, to expanding access to treatment services and taking strong action on alcohol and drugs.
"We are working our way through the 40 recommendations and will formally respond in March.
"I want to be upfront with the public, however, that many of the issues we're facing, such as workforce shortages, will take years to fix."