An unlikely alliance between economists and mental health practitioners could be the key to improving youth mental illness in Australia, according to a leading expert.

Former Australian of the Year Professor Patrick McGorry says Australia could save up to $10 billion annually by implementing an effective mental health policy.

Professor McGorry is appealing to Treasury with the potential cost savings of his early intervention approach to mental health care in young people.

''It costs about a third as much to treat patients in these more specialised streamed models of care with early intervention than it does if you just wait for them to become very severely ill and disabled and treated in traditional mental health care''.

''These are big numbers'', he said. ''If you include lost productivity in the workforce and those sort of things it's up to $30 billion [annually].''

Professor McGorry is professor of Youth Mental Health at the University of Melbourne, Headspace founder and a keynote speaker at Canberra Health's annual research meeting, which is being held this week at Canberra Hospital.

Professor McGorry has attracted criticism for his method of early intervention for young people with mental illness, but rejects those who believe he is over-medicalising the regular ups and downs of adolescence.

''Just because it's common doesn't mean it's normal,'' he said. ''It doesn't mean they don't deserve help of some sort.''

He hopes highlighting the financial benefits of improving youth mental health services will motivate policy makers to change the current system. ''It's not just the cost of services, it's things like better recovery rates, in terms of social and vocational recovery, less suicide and less homicide.''

And this week's conference looks set to provide some answers. ''It's important not to overtreat or undertreat, and the only way to know what the right balance is, the proportion of treatment to offer, is through really careful research.''