Dr. Anu Kataria, a psychiatrist who resigned after over 20 years at Cumberland, expressed sadness over the bed closures and a decline in service quality for patients, indicating she would consider returning if the government addressed wage and service quality issues.

During a directions hearing at the NSW Industrial Relations Commission (IRC) on January 21, 2025, the doctors' union agreed with the state government to expedite arbitration regarding the ongoing dispute over psychiatrist resignations.

Prior to the current crisis, NSW had 443 psychiatrist positions, with up to 40% already vacant, highlighting the pre-existing challenges in the mental health system.

Cumberland psychiatric hospital, the largest and oldest mental health facility in Australia, has closed its acute and rehabilitation wards, with predictions from the Royal Australian and New Zealand College of Psychiatrists (RANZCP) indicating that more closures are likely to follow.

Mental health wards across New South Wales (NSW) are beginning to close as negotiations to prevent mass resignations of psychiatrists continue.

As of January 21, approximately 205 psychiatrists have indicated their intention to resign, with 25 rescinding and 81 deferring their resignations, while 100 others plan to resign imminently.

More than 200 psychiatrists in the public system have expressed their intention to resign due to the government's refusal to agree to a 25% pay increase, which they argue is critical for recruitment and retention.

The situation has been exacerbated by the resignation of fourteen psychiatrists from Cumberland and the surrounding local health district, further stressing the already strained system.

Dr. Pramudie Gunaratne, chair of RANZCP in NSW, emphasized that the resignations are indicative of a collapsing mental health system rather than solely a wage issue.

Gunaratne raised concerns about vulnerable patients lacking care as psychiatric wards close, while NSW Health's deputy secretary, Matthew Daly, acknowledged the capping of referrals and amalgamation of services for better access, despite no formal approvals for closures.

Gunaratne warned that the loss of forensic psychiatrists could negatively impact the justice system, particularly for mentally ill individuals who may face incarceration without proper care.