Prison staff and inmates at Victoria's adult jails are tolerating sexual harassment, racism and bullying which is compromising safety and must be addressed, a report has found.
A cultural review of the system made public on Friday found a strong ethical, legal and economic imperative for reform of the system, which includes about 6600 people in custody and 5000 staff at 16 locations.
"Despite progress to elevate rehabilitation and reducing recidivism as primary objectives, cultural change across the Victorian adult custodial corrections system remains incomplete," the report noted.
"There is a clear gap between the intention of policies and programs and their operational translation."
A suite of recommendations includes calls for greater investment to focus on rehabilitation, safety and human rights, along with greater attention to the specific needs of Indigenous inmates.
Corrections Minister Enver Erdogan said the report painted a stark picture.
"The recommendations propose the most significant and wide-ranging reform to the corrections system in decades," the minister said in a statement.
"They have policy, funding, legal, cultural and operational implications that must be thoroughly considered and carefully planned."
He said the government had already started work, including the appointment of more Aboriginal welfare officers.
"We want to avoid people coming into contact with the justice system in the first place - but for those who do, the system has a duty of care to look after them and help them get their lives back on track," the minister said.
The Labor government announced the review in 2021 to examine the system, with the custodial population growing by 58 per cent over the past decade and the Productivity Commission reporting that it costs about $150,000 a year for a person to be held in custody.