A survey by the Victorian Equal Opportunity and Human Rights Commission conducted on 227 people found that 15 per cent had encountered racism on public transport and 31 per cent had seen it on the street, according to ABC news report.
It said 55 per cent of racist incidents were unreported.
The study, 'Reporting Racism: What you say matters', found that almost one in three of people surveyed had witnessed or experienced racism at work and three out of 10 witnessed it in public.
"It does have a profound impact on people and really it is about the rest of us being conscious about what we say, because what we say does have an impact on people," said Karen Toohey, the state's Equal Opportunity Acting Commissioner.
It also found that most of people did not report such incidents. "Generally people think you're being oversensitive and there's no formal process that will yield any formal results," the report quoted a respondent as saying.
Toohey attributed this to concern that nothing would be done, and the frequency of abuse.
In a bid to combat racism, there is a report which one who witnessed racism can fill out on the commission's anti-hate website which will be passed on to the police.
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