More than one in four federal ministers have gone on to work for a lobbyist firm, peak body or other special interest since 1990, a major new study has found.

The Grattan Institute released a report that investigated whether powerful interests were using lobbying, gifts, donations and special access to distort the democratic process.

The report finds that Australia’s policymaking process is vulnerable to being hijacked by vested interests at the expense of the public.

“Indeed, many of the ‘risk factors’ for policy capture – financial dependence, cosy relationships and lack of transparency in dealings between special interests and parliamentarians – are present in our system,” the report says.

The Grattan Institute tracked the career of 191 ministers and assistant ministers who have left parliament since 1990, using news reports, Wikipedia and LinkedIn to track their subsequent work. About 28% ended up in lobbyist firms, peak bodies, big business or consulting firms.

The Grattan Institute researcher and report author Danielle Wood said the movement was not inherently bad. But, she said, depending on the timing, it allowed former ministers to use inside government information and special access to benefit their new employer. It also called into question – in the public’s mind, at least – their decisions in government.

“People have a right to seek work after they cease their employment in the parliament,” Wood said. “I think the issue is around the timing.

“It’s an issue for three reasons. First of all, if someone went straight from a ministerial role into a special interest lobbying role, it’s always going to call into question the judgment they made in parliament. Did they make those decisions with an eye to a future employment?

“Putting in a waiting period creates a buffer that removes that risk or perception issue.”

Quick Guide Political lobbying in Australia: the basics Show What do lobbyists do? Lobbyists attempt to influence government policy or decisions on behalf of either a client or their own organisation. Ethical lobbying is a valuable and important element of a healthy democracy. It helps those who have a stake in government policy to convey their views and expertise. There are two broad types of lobbyists: third-party lobbyists, who are engaged as consultants; in-house lobbyists, who work directly for corporations or interest groups. Who hires lobbyists? For many Australians, lobbying conjures images of powerful corporations working to sway politicians behind the scenes. There is a truth in that. The big banks, mining and energy giants, pharmaceutical companies, casinos, Amazon, Google and Facebook all engage lobbyists. But lobbyists also work on behalf of not-for-profits and community groups, including for veterans, social workers, aged-care staff, school principals and environmental organisations. What is the lobbyist register? The lobbyist register is the public's only window into the world of lobbying. It's a publicly available online list of lobbying firms, individual lobbyists and their clients. The register was a huge step forward when it was introduced in 2008, but remains frustratingly opaque. It doesn't tell us who is lobbying whom, about what, or when. Compare that with the ACT, where lobbyists are required to file quarterly reports on their activities, or NSW, where ministers are required to publish their diaries. The federal register is also completely blind to the activities of in-house lobbyists. What is the lobbyist code of conduct? The code tells lobbyists how they must behave when approaching the government and is designed to maintain ethical standards. But the code is not legislated and has no real teeth. It goes largely unenforced and the punishments are weak. The worst sanction available to authorities is removing a lobbyist from the register. The US and Canada have fines or jail terms for law breaches. Who keeps an eye on lobbyists? Federally it's the prime minister's department that loosely oversees lobbying. It takes on a largely administrative role, rather than an investigative or regulatory one. Its core job is to maintain the register and communicate the code's requirements to lobbyists. It lacks independence, relies on reports of bad lobbying and rarely, if ever, takes enforcement action.

The report draws on other studies to show how Australians’ faith in their government is waning, and that the perception of corruption is increasingly widespread. It argues that the protections built into Australia’s political system to uphold integrity are either weak or waning. Investigative journalism is declining, the public service is being weakened and politicised, and a shrinking membership base in major parties is making them less representative and open to branch stacking.

The report analysed the industries most represented by the roughly 500 commercial lobbyists working in parliament. It found almost 80% of businesses who had hired lobbyists were operating in highly regulated industries.

Researchers also analysed ministerial diaries in New South Wales and Queensland and found that roughly two-thirds of external meetings by senior ministers were either with private business or industry peak bodies.

That far outweighed the proportion of meetings given to community or consumer groups in both states.

“If you’re in a higher regulated industry you’ve got the most to win or lose from government decisions,” Wood said. “At one level it’s not unexpected that they’re the ones knocking on the door, trying to meet with ministers, they might be giving money to political parties.

“But I think the flipside of that is quite a low proportion of meetings and access for the consumer, community or cause groups.”

The report recommends measures to improve transparency and boost integrity in Australia’s political system, including the establishment of a federal integrity commission, the appointment of an ethics adviser to politicians and clearer codes of conduct governing conflict-of-interest issues.

It also calls for a cap on political advertising expenditure by political parties and third parties during election campaigns, and driving transparency in donations by lowering the disclosure threshold to $5,000.

The authors also recommended real-time donations disclosures, the publication of federal ministerial diaries and the identification of all lobbyists – in-house and third-party lobbyists – working behind the scenes to influence policy.

“Those things shouldn’t be politically difficult,” Wood said. “It’s not giving one side an advantage over the other.

“All it is is opening up the system so that Australians can see where the money is coming from and who is meeting with who.”

• This reporting is supported by the Susan McKinnon Foundation through the Guardian Civic Journalism Trust