Attorney-General Mark Dreyfus will introduce legislation to parliament on Wednesday to set up the body, which will cost $262 million over four years and $90 million more than an earlier coalition proposal.
But the bill hasn't pleased everyone, with concerns a high legal bar of "exceptional circumstances" could result in minimal public hearings despite the body being designed to improve integrity in public life.
Mr Dreyfus said the legal bar would prevent unwanted reputational damage to those summoned to appear before what will be known as the National Anti-Corruption Commission.
"The commission should be required to determine that it is in the public interest that a hearing be in public," Mr Dreyfus said on Tuesday.
"Public hearings ... are more difficult to conduct, they raise questions about reputational harm, which are not faced when you hold private hearings and that is why most of these (state corruption) commissions' work has been done in private."
The Greens, whose support will be needed if the opposition does not back the government bill, have called for the commission to have broad scope to hold hearings in public.
Centre for Public Integrity chair Anthony Whealy said "exceptional circumstances" had "no real meaning" and would act as a brake on the public interest.
"Sunlight is the best disinfectant, and many corruption investigations would not be successful without public hearings," he said.
"The former coalition government did not want public hearings (and) ... it would be a shame if the current ALP government compromises with the opposition on this point."
The coalition is yet to finalise its position on the legislation but Nationals senator Perin Davey said the high threshold for public hearings was "reassuring".
"What we've seen in other jurisdictions is some dreadful outcomes, where innocent people, their reputations have been ruined as they've been dragged across the coals in public and then later found there was nothing to see," she told the ABC.
Independent MP Zoe Daniel also sees the value in the high legal threshold noting the commission would still have to thoroughly investigate a case.
"If you were to look at, for example, the New South Wales ICAC ... there's extensive investigation before a public hearing happens," she told Sky News.
"That's right and proper, but I also do think that there will be circumstances where the public will demand a public hearing and that should be available as an option to the commission."
Mr Dreyfus also confirmed the legal costs of any MP or public official facing an investigation would be covered by the taxpayer.
The proposed anti-corruption commission will investigate serious or systemic corrupt conduct across the entire federal public sector.
Design principles include a broad jurisdiction covering ministers, parliamentarians and their staff, statutory office holders, employees of all government entities and government contractors.
It will be independent of the government of the day, with discretion to start inquiries on its own initiative or in response to referrals.
Mr Dreyfus said it wouldn't be appropriate for him to refer the former coalition government to the commission, saying the public shouldn't fear it would be used as a vehicle for payback.
But the commission will have retrospective powers to investigate matters of its choosing.
Mr Dreyfus also said while Australia's broader whistleblower protection laws needed updating, there would be related protections in the new bill.
Labor wants the legislation passed by the end of the year.
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