Australia faces the prospect of lower investment, a weaker health system and higher business costs without a concerted effort to tackle corruption.
Assistant Treasury Minister Andrew Leigh outlined 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, said corruption could 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 said.
"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 said corruption could 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 said.
"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."
The NACC has received 738 referrals since it began operating on July 1, with 211 making it to a second stage of assessment.
The commission said 313 referrals had been assessed to be outside its jurisdiction, either because they did not involve a commonwealth public official or did not raise a corruption issue.