Politicians and judges will be subject to the same sexual harassment laws as the wider population under major workplace reforms.
The Morrison government has released its long-awaited response to the Respect at Work report but didn't commit to implementing all 55 recommendations.
Sexual harassment will be a valid reason for dismissal and included in the definition of serious misconduct in workplace laws.
The scope for complaints will be extended to two years, from six months, giving victims more time to come forward.
Prime Minister Scott Morrison said the changes were about changing the culture of Australian workplaces to keep people safe.
"Sexual harassment is unacceptable," he told reporters in Canberra on Thursday.
"It's not only immoral and despicable and even criminal, but particularly in the context of the Respect at Work report, it denies Australians, especially women, not just their personal security but their economic security."
The report recommended changing sex discrimination laws to force all employers to proactively take measures to eliminate the behaviour.
But the government only committed to assess whether that change would create complexity, noting similar provisions in work health and safety legislation.
There was also a call for the Human Rights Commission to be handed broad inquiry powers to investigate systemic harassment.
The government expressed concern about the commission conducting investigations while also working cooperatively with organisations.
It agreed some limited inquiry powers could be helpful but only when the government refers an issue.
Mr Morrison said money to support the recommendations would be included in next month's federal budget.
The government is aiming for a package of legislation to be introduced to parliament this year.
Attorney-General Michaelia Cash said including MPs and judges in sexual harassment laws would expose them to existing complaints processes.
"We'll be subject to the same law as anybody else, which means you'll be subject to the same consequences," she said.
Almost 40 per cent of women and more than a quarter of men experienced sexual harassment at work in the past five years, according to the latest data.
Sex Discrimination Commissioner Kate Jenkins handed her report to the government in January last year, with nine recommendations acted on in October's budget.
The coalition has been under enormous pressure to address women's safety after recent rape and sexual harassment allegations rocked federal politics.
It sparked a wave of major protests across the country and prompted questions about why the government's response to the report took so long.
Labor leader Anthony Albanese said the government's actions would now be crucial given change for women was long overdue.
"This can't just be another Scott Morrison political fix. Australian women want action from Mr Morrison, not just words," he said.
"It shouldn't have taken an alleged rape in Parliament House and a litany of scandals to get the Liberals to act. There's no excuse for their delays."
Australian Associated Press
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