Commissioners led by chair Justice Peter McClellan made their strongest statements yet to indicate recommendations to the Federal Government in December will include linking robust child protection systems within institutions to the retention of their tax concessions.

“I think that unless institutions do perform and put their house in order then the community needs to respond for them,” Justice McClellan told the royal commission on Friday during a final hearing into the Anglican Church, and a panel discussion that included Newcastle Bishop Greg Thompson.

“As a citizen I couldn’t agree more,” replied former Anglican Church of Australia general secretary, Reverend Dr Bruce Kaye.

The commission heard evidence from senior Anglicans, including former Primate of Australia Archbishop Phillip Aspinall and Bishop Thompson, about deep divisions that stood in the way of the church reaching a national consensus on professional standards and matters related to child protection systems.

Archbishop Aspinall said “deep underlying issues” meant one part of the church looked at another part of the church and said: “We actually have doubts about what you believe. We suspect, and this would never be said but it’s what’s there beneath the surface, we suspect that you may not really be truly Christian.”

He told the commission there would be some in the Australian Anglican Church who held the view: “Therefore we do not want to associate with you too closely institutionally, lest we be contaminated with those errors that you are making. Now this undermines a desire to collaborate nationally.”

Bishop Thompson, who did not attend a national conference in 2016 because of divisions within the church, said debates about sexuality, same sex marriage and the authority of the Bible that flowed from the divisions had “severely damaged” the church.

The diocese of Sydney, which had an evangelical tradition, and Newcastle, which had a more liberal tradition, had a long history of opposition, he said.

The divisions had “deflected energy and resources” during his three years as bishop as he tried to change a culture of abuse in the diocese, while managing “the extremes of Anglo-Catholic and evangelical disputes”.

During questioning Bishop Thompson agreed Newcastle diocese’s history included the grooming of young men who believed they had a spiritual calling. Bishop Thompson made public in 2015 that he had been sexually abused by the late Newcastle Anglican Bishop Ian Shevill.

“What you are saying is that there was gathered together a group of older ordained men who were seeking out younger men and brought them into an environment where they could be seduced, and then that pattern goes repeating down a few generations,” Justice McClellan put to the Bishop, who announced his resignation on Thursday.

“That’s my reading of some of the relationships, yes.”

Anglican Church of Australia General Synod general secretary Anne Hywood made an apology to survivors on the first day of the royal commission’s final hearing into the Anglican Church, saying that “in confronting our failings, we are ashamed”.

“We did not believe those who came forward and we tried to silence them. We cared more about the church’s reputation than those who were harmed,” Mrs Hywood said.

She acknowledged that individual dioceses had been left to deal with abuse allegations in the absence of any national guidelines or policies.

The hearing continues on Monday.