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Speaking to the Institute of Public Administration in Wellington today Ms Street said the public service had lost much of its protections against corruption in recent years.
The public sector had "lost the courage required of a neutral professional public service" which could combat "creeping corruption", she said.
She attributed that to a misuse of ministerial power, directing criticism at former ACC Minister and current Conservation Minister Nick Smith and Transport Minister Gerry Brownlee.
"Whether it's the misuse of a ministerial letterhead, whether it's telling Fish and Game that 'I'm going to curtail your legal mandate and funding unless you stop irritating me with your free and frank advice', whether it's saying to an airport security official, 'Look I'm the minister I'm running late, can I just get on this plane'."
Public servants felt they could less readily give free and frank advice to ministers for fear of the repercussions and "ministers fiddle with appointments".
"We've lost sight of the state sector's function to protect the citizenry from the excesses of executive power and deliver effective services with commitment principal and innovation.
"In short I believe our state sector is actually in a precarious position and a one in 100 year jolt is necessary to refocus it."
State Services Minister Jonathan Coleman was also at the conference, and took issue with Ms Street's description of Mr Brownlee's recent use of a side door at Christchurch Airport to bypass to try and get on a flight in time.
"That's well off the topic. That's not a fact."
He was just as dismissive of the need for a Royal Commission.
"We definitely don't need a very wasteful commission of inquiry into issues which Parliament has just gone over very carefully.
"We've been through all that thoroughly with the review of the legislation which Labour actually supported", he said in reference to a legislative rejig of the public sector which was passed in 2012.
He said Ms Street's comments were an attack on the integrity of the public service.
- By Adam Bennett of the NZ Herald