A federal anti-corruption agency, muscular anti-foreign bribery laws and political donations reform were required to help arrest the slide, senior members of the anti-corruption group said.
The result put Australia in 13th place globally for perceived openness, the country’s equal lowest ranking in the 20-year history of the report.
Comparable democracies such as the UK, the US and New Zealand have held steady or improved their index scores in the past four years.
The annual index, which ranks 168 countries on a scale of 0 (highly corrupt) to 100 (very clean), is compiled from 12 surveys of transparency experts and business people.
Australia’s 2015 score was 79, down from 80 last year. Denmark came in first with 91, followed by Finland (90), New Zealand (88) and the Netherlands (87). North Korea and Somalia ranked last with eight points each.
Brazil suffered the biggest fall, dropping five index points amid a bribery and money-laundering scandal engulfing its state-owned oil company, Petrobras, that has drawn in some of the country’s most senior politicians.
Libya, Spain and Turkey were singled out with Australia as “big decliners”, with Greece, Senegal and the UK praised for their progress.
The chair of Transparency International Australia, Anthony Wheatley QC, said Australia’s score was “the result of inaction from successive governments who have failed to address weaknesses in Australia’s laws and legal processes”.
Foreign bribery scandals such as those involving the Australian Wheat Board andSecurency had damaged Australia’s reputation and legislation introduced into parliament in December was “long overdue”, he said.
The group also called for a federal anti-corruption agency with similar powers to the NSW Independent Commission Against Corruption; a nationally consistent and tighter political donations disclosure regime; and safeguards against dirty money from overseas bleeding into the Australian finance or real estate industries.
Wheatley said addressing weaknesses in government would also raise the bar for the private sector.
The Turnbull government “seems to be taking steps that look very encouraging”, he said.