Objectives The aim of the present study was to document Australian policies on the physical health of people with mental illness and evaluate the capacity of policy to support health needs. Methods A search of state and federal policies on mental and physical illness was conducted, as well as detailed analysis of policy content and the relationships between policies, by applying the World Health Organization Mental Health Action Plan 2013-2020 as an evaluative framework. Results National policy attention to the physical health of people with mental illness has grown, but there is little interconnection at the national and state levels. State policies across the country are inconsistent, and there is little evidence of consistent policy implementation. Conclusions A coherent national health policy framework on addressing co-occurring physical and mental illnesses that includes healthcare system reforms and ensuring the interconnectedness of other relevant services should be prioritised. What is known about the topic? People with mental illness have a lower life expectancy and poorer physical health than people who do not have a mental illness. Government policy is critical to reducing inequalities in physical health and increasing longevity. What does this paper add? Evaluating policy developments against the World Health Organization's Mental Health Action Plan 2013-2020, this review identified a lack of cohesive national-level policy on how to improve the physical health of people with mental illness. Although there are some state-based policies regarding strategies for better prevention and management of the physical health of people with mental illness, evidence of policy implementation is either scarce or inconsistent. The capacity of current policy to translate into reforms that increase the physical and overall health of people suffering mental health difficulties seems very limited. What are the implications for practitioners? This paper outlines major policy gaps and an overall need for a national-level policy. National-level leadership on integrated health care is required, with monitoring to ensure health care reforms are genuinely informed by consumer and clinician views and are effective.