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Mental health care for older people is a significant and growing issue in Australia and internationally. This article describes how older people’s mental health is governed through policy discourse by examining Australian Commonwealth and South Australian State government policy documents, and commentaries from professional groups, advocacy groups and non-governmental organisations. Documents published between 2009 and 2014 were analysed using a governmentality approach, informed by Foucault. Discourses of ‘risk’, ‘ageing as decline/dependence’ and ‘healthy ageing’ were identified. Through these discourses, different neo-liberal governmental strategies are applied to ‘target’ groups according to varying risk judgements. Three policy approaches were identified where older people are (1) absent from policy, (2) governed as responsible, active citizens or (3) governed as passive recipients of health care. This fragmented policy response to older people’s mental health reflects fragmentation in the Australian policy environment. It constructs an ambiguous place for older people within neo-liberal governmental rationality, with significant effects on the health system, older people and their carers. [ABSTRACT FROM AUTHOR]