The comments came at a national human rights inquiry into the treatment of children in immigration detention.
His claim came a day after church leaders accused Australia of holding children in “inhumane” conditions.
The government rejected that as “offensive”. It says it is working to reduce the number of child detainees.
Dr Peter Young worked for International Health and Mental Services, a provider of health services at detention centres contracted by the government.
He told the Australian Human Rights Commission inquiry that he had collected figures showing “significant” mental health problems among child detainees, according to the Australian Broadcasting Corporation.
His company provided this data to the Immigration Department which then “reacted with alarm and asked us to withdraw these figures from our reporting”, he said.
Australia and asylum
- Asylum-seekers – mainly from Afghanistan, Sri Lanka, Iraq and Iran – travel to Australia’s Christmas Island on rickety boats from Indonesia
- The number of boats rose sharply in 2012 and the beginning of 2013, and scores of people have died making the journey
- Everyone who arrives is detained. They are processed in camps in Christmas Island, Nauru and Papua New Guinea. Those found to be refugees will be resettled in PNG, not Australia
- The government is believed to be towing boats back to Indonesia. It has also returned asylum seekers intercepted at sea to Sri Lanka.
- Rights groups and the UN have voiced serious concerns about the policies.
Later in the inquiry, Immigration Department Secretary Martin Bowles said he was not present when the contractor was allegedly asked to withdraw the figures and said: “If our staff did an inappropriate thing, then I will deal with that.”
A spokesman for Immigration Minister Scott Morrison told the BBC that the government would await the inquiry’s outcome as well as “any supportive evidence” in the final report.
He stressed that the current government had reduced the number of children in detention by almost 35% since taking power last year.
‘State-sanctioned child abuse’On Wednesday, the Australian Churches Refugee Taskforce released a report condemning the lack of protection for child detainees and recommending that an independent guardian be appointed.
The chairman of the taskforce, Anglican Dean Peter Catt, told reporters that the government had ignored independent evidence about the plight of the children, and that this amounted to “state-sanctioned child abuse”.
Mr Morrison’s spokesman said such claims were “shocking and offensive and the minister rejects these categorically”, adding that the government was committed to ensuring children were protected from exploitation and abuse.
Last week, Australia’s top human rights official Gillian Triggs voiced concern over the welfare of children at the Christmas Island detention centre and said there had been a spike in self-harm cases.
Australia detains all those who arrive by boat to seek asylum. Detainees are held on Christmas Island and in camps in Papua New Guinea (PNG) and Nauru. The UN and rights groups have strongly condemned conditions in the offshore camps.
The government says its tough asylum policies are intended to save lives by stopping people getting on dangerous boats to make the journey to Australia.