In an interview published Saturday in The Weekend Australian, Pell acknowledged children were abused by priests, who were often simply transferred to other positions if they were found out.
"Back in those days, they were entitled to think of pedophilia as simply a sin that you would repent of," he said. "They didn't realize that in the worst cases it was an addiction, a raging addiction."
Pell, ordained as a priest in 1966, had been a bishop since 1987 and archbishop of Sydney since 2001.
His comments to the magazine follow an accusation by Detective Chief Inspector Peter Fox that he was taken off the investigation into clerical pedophilia because he annoyed church officials, The (Sydney) Daily Telegraph reported. Fox has accused the church of decades of coverup.
"An archbishop, a bishop and a priest are implicated in coverup," he said. "There's something very wrong when you have so many pedophile priests operating in such a small area for such an extended period of time with immunity."
Pell said he does not think a royal commission is needed to investigate pedophilia.