Speaking ahead of a Mental Health and Wellbeing forum in Adelaide on Friday, Patrick McGorry said that the rate of anxiety and depression has surged with the introduction and spread of smartphones.
McGorry was named Australian of the Year in 2010 for his work establishing headspace, Australia's National Youth Mental Health Foundation.
"There's a paradox - (young people) have never been physically healthier but their mental health has never been worse," he told News Corp Australia in Adelaide.
With a general election looming in May, McGorry called on both major parties to commit to real solutions to the mental health crisis rather than simple "awareness" campaigns.
The government's National Mental Health Commission found in 2016 that the annual cost of mental ill-health was approximately 4 percent of gross domestic product (GDP) or 60 billion Australian dollars.
McGorry cited a study that found that, despite widespread national awareness campaigns, only 16 percent of Australians suffering from depression accessed evidence-based care.
"If 16 percent of women with breast cancer got access to evidence-based care, it would not be tolerated," he said.
"We are currently failing to fix," he said. "If this continues, we will be falling further behind in our obligation to improve mental health services for all"
"In a federal election year, I want to see a commitment for more funding to ensure better outcomes," he added.