A study showing public servants are staying silent about cronyism and nepotism in their workplaces supports calls for a federal anti-corruption commission, the report's author says.
The report, published in a leading journal on government, found only one third of Commonwealth bureaucrats who saw corruption had reported it to their agencies.
Report author Jeannette Taylor said the results gave a disturbing picture of the public service and supported calls for an independent federal anti-corruption agency.
Dr Taylor's study, published in 2019, has received the Sam Richardson Award for the most influential paper published in the Australian Journal of Public Administration.
The report has won the award as advocates wait for the government to fulfil a 2018 promise to create a federal watchdog against corruption.
Dr Taylor said there was a small minority of public servants who said they had witnessed corruption. But her study found the most common forms of corrupt behaviour seen in the federal bureaucracy were preferential treatment of friends and family, such as appointing them to jobs without regard to merit.
Most public servants who reported witnessing the behaviour said they had not reported it through internal channels for whistleblowers.
Dr Taylor, an associate professor at the University of Western Australia, said her research found that whistleblowing declined as cronyism and nepotism became more common.
"That's why it's disturbing, because when people don't report it, it means that form of corrupt behaviour will continue to persist and then it might be seen as a norm," she said.
"It goes against everything we think of the public service, the merit principles where people should be recruited and selected based on merit, that they should be promoted based on merit. These are said to be the centrepiece of public service in non-authoritarian governments."
The public service's annual survey of staff last year found about 4 per cent of bureaucrats said they had witnessed corruption. Nearly 70 per cent of this group said they had seen cronyism, and about 30 per cent said they had witnessed nepotism.
"If we think that preferential treatment of friends and family members are largely confined to developing countries, then think again," Dr Taylor said.
"Several reports by anti-corruption bodies in Australian states suggest these cases are harder to investigate and monitor. It is often difficult to get access to direct evidence of such an issue.
"There is also a low level of trust in the management to tackle the issue, not to mention concerns of retaliation."
Employees who witnessed cronyism and nepotism in the public service often felt cheated, resentful, and demoralised, and in turn had no or little motivation to work hard, Dr Taylor's report said.
"This can ultimately undermine public sector productivity and good governance.
"Citizens who learn about cronyism and nepotism in the public service through the mass media and other modes of public communication often lose trust in the government's capability to govern."
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Conflicts of interest and fraud were the next most common corrupt behaviours that public servants said they had observed.
The study found the cultures of public service agencies influenced whether staff reported corrupt behaviour. Public servants were less likely to report cases of corruption in agencies with cultures emphasising respect for authority, hierarchy, and the importance of following rules.
Dr Taylor said her report's findings supported calls for a federal anti-corruption watchdog.
"Given this study found there was low level of internal whistleblowing, it suggests the importance of improving employees' access to external channels.
"If people for whatever reason feel reluctant to report internally, then there should be an external channel available for them."
The government has said it remains committed to establishing an anti-corruption agency, and that it is considering feedback on recent consultations on draft legislation. However advocates for an independent integrity watchdog have accused the government of abandoning its promise.
Polling has shown strong public support for a federal integrity agency.
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