In a speech to parliament's Federation Chamber, Dr Haines said every day seemed to bring a new scandal for the government, and other grant programs were now 'under a similar cloud'.
Dr Haines singled out then-Sports Minister Bridget Mckenzie, Prime Minister Scott Morrison and deputy Prime Minister Michael McCormack in the speech.
"At the centre of sports rorts is an ugly reality-that is, that our government perpetrated a considered and planned abuse of power," she said.
"These are grants that were applied for in good faith by good people all over the nation-good people who had high hopes for good things in their local clubs."
IN OTHER NEWS:
Dr Haines said those people had wasted their time.
"They've found out that this wasn't a computing error or a bureaucratic bungle," she said.
"It was, in fact, a deliberate use of ministerial discretion not for public good but for political gain - an abuse that the minister, the Prime Minister, the deputy Prime Minister and other government members are completely happy to defend."
Dr Haines said the public had not believed the government spin.
"Everyone knows that the real question is not answered here... people all over the nation know that the emperor has no clothes," she said.
Dr Haines said the Prime Minister had created an "alternative reality where the former minister for sport did nothing wrong".
She emphasised the need for a strong federal integrity commission as "an urgent and necessary intervention into this nation's spiralling crisis of trust in political institutions."