In a report published yesterday, the bureau's director, Don Weatherburn, said rates of recidivism could be reduced if offenders were given intensive treatment for their psychiatric and substance abuse problems when they were released from jail.
The study looked at 1208 NSW prisoners who took part in a mental health survey by the government agency Justice Health in 2001. Each person's mental status was then linked to the state's re-offending database to track their criminal history for five years before entering prison and 24 months after release. It found two out of three prisoners reoffended within 24 months.
After controlling for other factors, such as gender, age, indigenous status and number of prior court appearances, the study found the risk of reoffending was significantly higher for prisoners with a co-morbid psychiatric and substance disorder, at 67 per cent.
There was little difference in the risk of re-offending between those without either a mental health or drug problem (51 per cent), those with a drug problem only (55 per cent) and those with a mental illness only (49 per cent).
''Increased investment in treating prisoners with a co-morbid mental health disorder would not only make the community safer but it would also save money by reducing the rate of reoffending and return to prison,'' Dr Weatherburn said.
The study reiterated that mental illness and drug problems were more prevalent among prisoners than the general population. Just 23.8 per cent of prisoners reported neither issue.
An offender's mental health status and substance misuse were amenable to change with effective treatment, the report said.