Prime Minister Scott Morrison has announced a new anti-corruption commission, having come under sustained pressure from crossbench MPs with the balance of power.

Key points: The PM has previously described a federal anti-corruption watchdog as a "fringe issue"

The PM has previously described a federal anti-corruption watchdog as a "fringe issue" The commission will have two divisions overseeing law enforcement and the public sector

The commission will have two divisions overseeing law enforcement and the public sector It comes after sustained pressure from the crossbench, Labor, Greens and minor parties

Labor, the Greens and minor parties have long campaigned for a corruption watchdog, arguing current systems are woefully inadequate.

During the final sitting weeks of the parliamentary year, Mr Morrison had said his Government was not against a national anti-corruption watchdog but described it as a "fringe issue" being pushed by the Opposition.

Speaking today, Mr Morrison said it was crucial the public had confidence in Commonwealth employees and agencies.

The new commission will have two divisions — a law enforcement integrity division and a public sector integrity division.



"We have looked at all the alternatives and we believe that this is the best way to achieve this; the most sensible, measured, carefully considered way to address these issues," Mr Morrison said.

The Government will create a new role called the Commonwealth Integrity Commissioner, which will have overarching oversight of both divisions.

Working under that person will be a Law Enforcement Integrity Commissioner and a Public Sector Integrity Commissioner.

The law enforcement division is an expansion of an existing body that has jurisdiction over the Federal Police, Austrac, the Department of Home Affairs and parts of the Department of Agriculture and Water Resources.

It will be expanded to include the whole of the Department of Agriculture and Water Resources, the Australian Competition and Consumer Commission and the Australian Tax Office.

The public sector division will cover the remainder of the public sector, including all parliamentarians, departments, agencies, their staff and federal judicial officers.

"The public integrity commission will investigate allegations of criminal allegations in the public sector," Attorney-General Christian Porter said.

But he said the public sector division would not hold open hearings.

"This is not a show-trial body," Mr Porter said.

"An investigative body necessarily investigates in a non-public way, which is very different from operating in secret."

Anti-corruption commission 'months in the making'

Both divisions will investigate allegations of criminal corruption. The Government will also make changes to the criminal code to ensure it reflects modern standards.

Mr Morrison was adamant the Government had been working on establishing an anti-corruption commission since January, when Malcolm Turnbull was prime minister.

He denied the Coalition had been forced into making the announcement, having gone into minority government after Mr Turnbull left the Parliament.

"This has been done after long and careful consideration and I really want to commend the attorney, Christian Porter, for the extraordinary work he has done here and his department as well that have pulled this together," Mr Morrison said.

"This is a very complex issue. It's a very serious issue. You can't deal with it in a press release which you pretend is the result of a year's worth of work.

"If that's the best the Labor Party can come up with a year's worth of work, well, I think that says a lot about how they consider these serious issues."

The ABC understands that ahead of the final sitting fortnight, Nationals MP Llew O'Brien told Mr Porter he wanted to see progress on the establishment of an anti-corruption commission by the end of the year.

Failure to deliver that would have prompted Mr O'Brien to assess his options, including the possibility of crossing the floor and supporting a Labor or crossbench bill to establish a commission.

Labor leader Bill Shorten in January pledged to create a federal version of the Independent Commission Against Corruption (ICAC) if his party was elected next year.

But Mr Morrison, speaking today, said replicating the NSW ICAC would create a "kangaroo court" and "be little more than a forum for self-serving mud-slinging and the pursuit of personal, corporate and political vendettas".

Mr Shorten said he was pleased the Government was "taking a step towards Labor's plan" for an anti-corruption commission.

"I'm afraid that one can only draw the conclusion that the Government's heart is not in having a fair dinkum anti-corruption commission," he said.

"It's too little, too late. Mr Morrison's proposal is not a fair dinkum anti-corruption commission, it is to limit it in scope, to limit it in power, and it has no transparency."

The Australian Public Service Commission revealed last month that more than 4,300 federal public servants believed they had witnessed corrupt behaviour within the previous year.

Almost 80 public servants were investigated for corruption and 72 were found to have breached their code of conduct.