A former detainee, known under the pseudonym Fred, suffers post-traumatic stress disorder, "crazy flashbacks" and panic attacks from what he saw and experienced at the centre.
Fred, initially at the centre on remand after allegedly providing a false name to police, said staff watched him get bashed by fellow detainees.
"(Workers would tell detainees) 'he said this' and that would cause arguments and therefore fights. They were doing that just for sport, to watch," he said.
An inquiry into child sexual abuse allegations in Tasmania's public institutions is holding seven days of hearings examining the facility, which has operated for more than 20 years.
The state government has in recent days stood by a commitment made in September to shut the centre within three years, despite calls from the national children's commissioner and others to close it immediately.
Fred said he saw three or four staff "jump on" detainees, knee them to the head and bash them on the ground.
"I saw a female detainee dragged from the shower naked by her hair, placed on the ground and cuffed," he said.
He also saw the violent rape of one detainee by another, and said he was once handcuffed on a chair and interrogated like "something out of the movies" after his friends escaped.
"They less I said the angrier they got," Fred said.
He was also held down and strip-searched. He wrote a complaint and slipped it under his unit door but never heard about it again.
"Just close this place down and start again. It is systemic," he said.
Fred said he was unable to trust anyone in a position of authority.
"That's had implications through my life where I've panicked and done the wrong thing because I was fearful of what they'd do to me," he said.
Assistant centre manager Fiona Atkins, who has worked at the centre for 20 years, told the inquiry on Wednesday she recalled one incident where a child said they had been sexually assaulted.
Tasmanian Commissioner for Children and Young People, Leanne McLean, said staffing levels at the centre were at an all-time low, resulting in restrictive practices that breach a United Nations convention.
"My understanding is today we have moved back to restrictive practices, that young people may be cycling in and out of their rooms on an hourly basis," she said.
"When you visit the facility to speak to young people ... through a small window hole in the door, it really is awful. I know the staff there don't like it either."
Ms Atkins said it was "extremely difficult" to staff the centre to the required standard due to stand-downs and cases of worker's compensation.
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