The Mental Health Community Coalition ACT's budget submission has highlighted deficiencies in support for mentally ill prisoners being released from the Alexander Maconochie Centre.

The group estimates that up to 80 per cent of prisoners have a mental health issue, and describe the jail as Canberra's largest mental health facility.

Policy and sector development manager Simon Viereck said transitional support services for released prisoners are currently unable to cope with demand.

Mr Viereck said prisoners often felt ''isolation, hopelessness and despair'' in the weeks immediately after release, making them particularly vulnerable to self-harm and drug overdose.

The group has called on the ACT government to commit funds for transitional mental health services in this year's budget.

Mr Viereck said an injection of $1 million would help to substantially address the gaps.

He described that funding as an ''investment'', which would provide returns by lowering the economic and social costs of recidivist crime, drug use and suicide.

''We will continue to see those high rates, specifically with the AMC, unless we step in and support people through that transition period,'' he said.

The two key transitional services are currently provided by St Vincent de Paul and the Canberra Men's Centre. A host of other refuges and support organisations, which are not designed for former prisoners with mental health issues, are now picking up the slack, Mr Viereck said.

''There's been a lot of work done around the concept of through-care, which is about supporting people during their time in the prison, and that support carrying on afterwards,'' he said.

''In actual practice, there's still quite a long way to go.

''We do have some support there, but the need is quite clearly higher than the service capacity.''

The Mental Health Community Coalition is also calling for the ACT government to recommit funds to build a secure psychiatric unit.

Inmates with high clinical needs are currently being treated by ACT Forensic Mental Health Services, or placed in the 10-bed crisis support unit at the jail.

But Mr Viereck said that system was inadequate.

He has called on the government to recommit to the construction of a 15-bed secure mental health inpatient unit.

The ACT government had delayed construction of the unit last year, after costs blew out to $30 million.

''It is a substantial investment, there's no doubt about it,'' Mr Viereck said.

''But the question is whether the cost to the people who are not receiving the care at the moment, whether that outweighs it.

''The cost of not providing support, to the hospital system, to the justice system, and of course the personal cost to these people themselves, their families, and to the potential victims of another crime, that cost is very, very substantial.''