The Church said Friday it would accept "98%" of recommendations made by a high-level government inquiry into child sexual abuse, which uncovered shocking accounts of widespread abuse inside Australian religious institutions.
But church leaders said that they would maintain the sanctity of confession, arguing to remove it would infringe on religious liberties.
"The only recommendation we can't accept is removing the seal of confession," Sister Monica Cavanagh, president of Catholic Religious Australia said at a press conference.
The Church's decision to reject the recommendation remains a huge stumbling block for the institution to regain the trust of the public, which has been riven by child abuse scandals in Australia and abroad.
It comes amid a tumultuous week for the Catholic Church as pressure builds on Pope Francis to ensure abusers within the church are held to account.