One of the most comprehensive studies tracking the health of Australians has released findings that paint a disturbing picture of the nation's battle with diabetes and obesity.

The AusDiab study was funded through a National Health and Medical Research Council grant and followed 11,000 Australians for 12 years.

Researchers found the incidence of diabetes remained very high, with almost 270 adult Australians diagnosed each day.

Patients with diabetes were found more likely to suffer other conditions as well.

Prevalence of depression in patients with diabetes was 65 per cent, which was much higher than those without diabetes.

Study leader Professor Jonathan Shaw says the link between diabetes and depression is complex.

"It appears there's a bit of a two-way street here. People with depression are more likely to develop conditions like diabetes, partly because they feel less able to pursue healthy lifestyles," Professor Shaw said.

"But partly because there are also some - not fully understood - metabolic pathways that link the two."

Professor Shaw says people with diabetes also had twice the rate of cognitive impairment compared to those without diabetes.

"One of the biggest contradictions is that we are seeing people living longer but with higher rates of chronic diseases. So their quality of life is compromised by disease," he said.

Professor Shaw says a person who is aged 80 in 2013 may have been living with diabetes or high blood pressure for 20 years, which has a damaging effect over time.

"As we get better at managing chronic disease, we're seeing people living longer and with higher rates of frailty and cognitive impairment," he said.

In line with previous trends, obesity levels continued to rise.

The report found that the average gain in waist circumference over the 12 years of the study was 5.3 centimetres and it was greater in women than men.

Interestingly, people aged 25-34 were gaining more weight than other age groups.

"Younger people don't seem to think about diseases in relation to their weight or their waist circumference, but that's where most of the weight gain is occurring," Professor Shaw said.

"They've stopped doing exercise they did as a young single person - they've taken on a lot of family responsibilities - but they don't yet feel any great connection or risk of developing diseases such as diabetes.

"That's where we need to focus our efforts on preventing weight gain, because it's much easier to prevent weight gain than it is to achieve weight loss."

Despite public education campaigns, more than a third of people in the study were not meeting the physical activity guidelines of 30 minutes of exercise a day.

Obesity remains one of the biggest risk factors for type two diabetes.

Researchers measured how much exercise people do, and how much time they were sitting down every day.

Professor Shaw says from this, they found many people's perceptions were inaccurate.

"People significantly overestimate the amount of exercise they're doing by about 50 per cent, and they underestimate by about half the amount of time they're spending sitting down."

Professor Shaw says tools exist to help people live healthier lives.

"We need to be prepared to take some tough decisions but it's not impossible. Look what we have achieved with gun control, smoking cessation and water restrictions," he said.

Professor Shaw says a Preventative Health Task Force came up with a raft of recommendations designed to make Australia healthier.

"Many of those ideas are now sitting on shelves gathering dust. Everything should be on the table: taxation levers, town planning, office space layout needs to be reconsidered to tackle the growing personal and community impact of chronic disease," he said.