Two new reports have highlighted the extent of corruption in the Australian Public Service (APS). One of the says that corrupt practices may cost the economy as much as $72 billion dollars since 2012.

Australia’s Public Service Commission has released a report that says that 5 percent of APS survey respondents said they had witnessed another employee engaging in behaviour they considered to be corrupt. That equates to 4900 people. The number has doubled in three years.

Of those who said they witnessed corruption:

• 64 percent of those respondents reported that they had witnessed cronyism.
• 26 percent reported that they had witnessed nepotism in the workplace.
• 21 percent reported that they had witnessed ‘green-lighting’, that is making official decisions that improperly favour a person or company, or disadvantage another.

“Corruption involves the dishonest or biased exercise of a  public official’s functions. In many cases, corrupt conduct will justify a serious sanction such as termination of employment. Corrupt conduct can also lead to criminal prosecution of the employee.”

For the first time, this years APS employee census asked employees whether they believed their workplace operated in a high corruption-risk environment. This was based on whether the agency held information, assets or powers were of value to others.

The majority of respondents in 59 agencies agreed that their workplace operated in a high corruption-risk environment. Most were confident they knew what to do if they witnessed corruption in their workplace. The majority were also confident that their colleagues would report corruption if they witnessed it.

The PSC report is available here in the.

The cost of corruption is revealed in an analysis by the Australia Institute of data from Transparency International’s Corruption Perception Index (CPI). “The effects of rising perception of corruption in Australia since 2012 could have reduced Australia’s GDP by $72.3 billion, or 4 percent,” said Rod Campbell, Australia Institute Director of Research and co-author of the report.

“Since 2012 Australia has slid from 7th to 13th on the index, with its score declining from 85 to 79. Economic analysis estimates each point decline in this score translates into a reduction in GDP per capita of $486. Extrapolating across Australia’s population, our GDP could have been $72.3 billion higher this year had we maintained our 2012 reputation for minimal corruption.

“This is in line with World Economic Forum estimates that corruption costs 5 percent of GDP worldwide. The economic impacts of corruption are well-known. Business costs increase, capital is not allocated efficiency and inequality worsens.

“Australia needs policies to address this threat to our economy. A federal anticorruption commission with teeth is needed to increase public trust and tackle the perception of corruption in Australia.

“The perception of corruption is on the rise, the number of public servants who have witnessed corrupt behaviour is on the rise and public trust in federal parliament is at an all-time low. As well as the obvious cost to democracy, corruption and the perception of corruption also damages our economy.

“Not only does corruption cost business, but businesses do not want to operate in countries where there is a perception of corruption.”

“This research shows that the business community also has a stake in perceptions of corruption and should be supporting calls for a federal anticorruption commission,” Mr Campbell said.

The Australian Institute report is available here.