This year's Victorian budget outlines $277 million in school funding for government and specialist schools, with mental health and wellbeing a "core" priority.
Shepparton Neighbourhood Schools Project founder Peter Eastaugh said the funding came as "very exciting" news.
For the past decade, Dr Eastaugh has connected "Neighbourhood Schools" Wilmot Rd, St Georges Rd and Gowrie St with paediatricians who develop case management plans for students impacted by trauma.
In 2017, Mooroopna and Mooroopna Park primary schools joined the program, which now funds a multi-disciplinary team including six play therapists to provide therapeutic intervention.
“If anyone deserves it, we deserve it — I want $120,000 per year for each school,” Dr Eastaugh said.
He said despite the "massive success" of the program, funding mental health interventions had remained extremely limited despite the growing demand.
“We have a waiting list of at least 150 kids with problems, and our schools can only fund those therapists at the lowest level — they can't survive financially,” he said.
“But if we are going to deal with the problems in our community — unemployment, youth behaviour, mental health, drug use — 80 per cent of mental health problems in adults is related to early childhood trauma.
“Early childhood trauma produces neurological problems and quality therapy intervention in early childhood results in much better outcomes — we've seen it.”
The $200 million will be rolled out to all regional and rural government schools from Term 3, 2022, with metropolitan schools to follow from 2023.
The funding will target evidence-based programs — from therapy dog programs to mental health first aid training — and support the hiring of more mental health and wellbeing staff.
It will also expand the Mental Health in Primary Schools pilot to 100 schools — a partnership with the Murdoch Children’s Research Institute to employ mental health and wellbeing co-ordinators onsite.
St Georges Rd Primary School principal Adam Burbidge said it had been "a challenge" to fund the school's play therapy programs and onsite paediatrician.
“In both primary and secondary schools we've been seeing mental health is a huge problem,” he said.
“A lot of students have experienced trauma and one of the most effective responses is play therapy ... but it's always about money and we're currently trying to self-fund our programs.”
Mr Burbidge traditional mental health supports weren't appropriate for young children.
“But with play therapy, it's child-initiated, they're in control and they're able to manage emotions, form relationships with students, develop trust and engage in learning,” he said.
“And with our paediatrician, they can identify students who are struggling and what the problems are, and then we can become more aware of the mental health issues that are there.”
The funding builds on the state government's promise to fund a mental health practitioner in every government secondary and specialist secondary school by the end of the year.
Acting Premier and Education Minister James Merlino said the mental health fund would "fundamentally transform" the way the government supported its young people.
“Whenever I visit a school, families and teachers tell me mental health wellbeing is the single biggest issue affecting our kids,” he said.
“That means putting schools at the heart of our response — giving them the funding, the staff, the tools and whatever else they might need to be there for our kids.”