Australia faces the prospect of lower investment, a weaker health system and higher business costs without a concerted effort to tackle corruption.
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Assistant Treasury Minister Andrew Leigh will outline some of the risks from corruption in a speech to Transparency International Australia in Melbourne on Wednesday.
Australia dropped to 18th place in the organisation's global corruption perception index between the end of the Labor government in 2013 and 2021.
In January, the ranking lifted five places to 13th with the introduction of the National Anti-Corruption Commission.
Australian researcher Tony Ward estimated the fall in the index over the nine years of coalition government equated to 0.6 per cent lower economic growth.
Companies operating in corrupt environments often face higher costs due to bribery demands, unofficial "fees" and bureaucratic delays.
The World Economic Forum estimates corruption increases the cost of doing business by up to 10 per cent globally.
Dr Leigh, whose portfolio also takes in competition policy, says corruption can create barriers to entry for new businesses, limiting competition and stifling innovation.
"If bribes are the price of entry then only those who can afford to pay a bribe ever have the opportunity to get started," he will say.
"Investing in new ideas takes time and money - money that could be spent convincing officials to grant a contract or block a competitor's proposal."
Zeroing in on the health sector, Dr Leigh says corruption can impact the construction and maintenance of facilities, the purchase of equipment and supplies, the distribution and use of drugs, safety regulations for products used in procedures, the education of health professionals, and medical research.
A study published in 2015 put the cost of health fraud at $455 billion globally.
The minister also cited International Monetary Fund research which found tax revenues - needed to fund essential services - are higher in countries perceived to be less corrupt.
And a global reduction in corruption could return $1 trillion in lost tax revenues.
"Corruption diminishes us all," Dr Leigh will say.
"But corruption has economic costs too. It undermines health and education. It diminishes tax revenues. It worsens inequality. It discourages investment. And it erodes trust."
Australian Associated Press
