The federal government says it will provide $9 million over three years to establish drug and alcohol services in Batemans Bay.
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Health Minister Greg Hunt said the funds would help Mission Australia "support a Triple Care Farm, 12-week holistic rehabilitation program and the development of a new 10 bed patient residential center in the Batemans Bay area".
"Alcohol and drug misuse affects not just the individuals involved, but the people and communities around them," Mr Hunt said.
Gilmore MP Ann Sudmalis said the move followed two years of lobbying.
"I have seen firsthand and listened to the success stories from young people who have graduated from Triple Care Farm," she said.
"There is every good reason to assist these young adults to get through the detox, to be nurtured through rehabilitation and to be mentored through a return to their families or into housing and work.
"The development of this facility will offer a place where young people between 16 and 24 can detox and then attend the exceptional rehabilitation program that operates at Triple Care Farm, it will help them get their lives back on track.
"The team at Triple Care Farm has a proven track record in providing tailored programs and ongoing support and I hope other facilities in Australia can look at this one as a source of inspiration."
Liberal Candidate for Gilmore, Warren Mundine OAM welcomed the announcement.
"This funding and the services Mission Australia will be able to deliver could not be more needed, or be more welcome," Mr Mundine said.
"Ann has been a passionate advocate for these additional services for the southern part of Gilmore and I look forward to continuing her great work."
Mission Australia's Triple Care Farm Program Manager, Gabriella Holmes said Mission Australia has long advocated for the need for more youth-specific alcohol and other drug residential rehabilitation and withdrawal services across Australia.
"We welcome the Federal Government's recognition of this need in Batemans Bay and look forward to working closely in coming months with the local community and government to develop a program to increase young people's chances of successful recovery from alcohol and drug misuse."