Victorian Premier Jacinta Allan has repeatedly declined to answer a direct question that every taxpayer funding the state’s $100-billion-plus Big Build deserves answered: how much has CFMEU corruption cost the public purse? The refusal, which has drawn sustained criticism from the opposition, crossbenchers and independent accountability advocates, is deepening scrutiny of a government already under pressure over its fiscal position and its historically close relationship with the construction union.
The question the Premier won’t answer #
At multiple press conferences over recent weeks, journalists have asked Ms Allan to put a dollar figure — or even a credible range — on the financial impact of the alleged corrupt conduct that triggered the federal government’s administration of the Construction, Forestry and Maritime Employees Union’s Victorian construction division. Each time, VCN understands, the Premier has declined to provide an answer, instead offering general statements about her government’s commitment to integrity and its cooperation with the national administration process.
The refusal is not a minor communications misstep. The Big Build — the sprawling portfolio of rail, road, hospital and social-housing projects that defines the Allan and Andrews governments’ decade-long infrastructure program — has been delivered almost entirely through contractors whose workforces were covered by CFMEU enterprise agreements. If those agreements were inflated, if productivity was suppressed by standover tactics, or if subcontractors paid inflated or fictitious invoices to avoid industrial disruption, the cost flows directly to the state budget and, by extension, to every Victorian.
What the administration has already established #
Federal administrator Mark Irving KC was appointed to oversee the CFMEU’s Victorian construction branch after a series of investigative reports — including findings aired at the royal commission level in other jurisdictions and reporting by major mastheads — alleged widespread links between union officials and organised crime, as well as allegations of extortion, bribery and the manipulation of enterprise bargaining outcomes on major government projects.
Mr Irving has not yet publicly quantified the cost of that alleged conduct to Victorian government projects. However, industry sources — speaking to VCN on background — have said the question of “loaded” enterprise agreements and inflated site allowances on Big Build projects is one the administrator’s office is actively examining. VCN understands investigators are reviewing arrangements on a number of projects where, sources say, productivity benchmarks were allegedly far below industry norms, and where contractors are said to have factored in significant contingency costs to account for what the industry privately calls “union risk.”
None of those examinations have yet resulted in published findings, and no individual or company has been found by any court or tribunal to have engaged in wrongdoing in relation to Victorian government projects specifically. All persons and entities connected to these investigations are presumed innocent of any wrongdoing unless and until a court finds otherwise.
Why the cost question matters so much #
Victoria is carrying a net debt position that the state’s own budget papers project will exceed $170 billion by 2027–28. Infrastructure cost blowouts — including the now-cancelled Airport Rail Link and the revised cost trajectory of the North East Link — have already generated fierce public debate about value for money on major projects.
Independent economists and construction industry analysts have told VCN that quantifying the “corruption premium” on large government projects is genuinely difficult, because it is embedded in negotiated enterprise agreement rates, in unofficial side arrangements, and in the contingency margins that principal contractors build into their tenders before they ever break ground. One analyst, speaking on background, estimated the premium on large unionised Victorian government sites could historically have run at between five and fifteen per cent of labour costs — though they stressed that figure was an industry-wide estimate, not a finding about any specific project or union official.
That is not a trivial range. On a $10-billion project with a labour component of, say, 25 per cent, even the lower end of that estimate represents hundreds of millions of dollars. Across the full Big Build portfolio over a decade, the potential aggregate figure — if such a premium existed and is ultimately proven — would be very large indeed. Which is precisely why the Premier’s reluctance to engage with the question is generating so much frustration.
The government’s position — and its limits #
Government spokespeople have pointed out, with some justification, that Ms Allan cannot responsibly put a number on something that has not yet been independently quantified. They have noted that the administration process is a federal matter, that the Victorian government is cooperating with investigators, and that pre-empting findings that have not been made would itself be irresponsible.
That is a defensible legal and process argument. It is less defensible as a political accountability position, because Ms Allan’s government was — and remains — the entity that signed the contracts, approved the project budgets, and set the industrial relations framework under which Big Build projects were delivered. Commissioning an independent audit of the cost impact on Victorian government projects is entirely within the state government’s power, and the Premier has not, as of the time of publication, indicated any intention to do so.
Opposition leader John Pesutto and crossbench MPs have called for exactly such an audit. The Greens, whose support was instrumental in passing elements of the government’s legislative agenda, have also flagged concern about the accountability gap.
The political context: Allan’s leadership under pressure #
Ms Allan assumed the premiership from Daniel Andrews in September 2023, inheriting both the Big Build’s legacy and its complications. Her government’s polling has softened considerably since then, and the CFMEU scandal — which has created acute tensions within the Victorian ALP, given the union’s historical role as a major financial and organisational backer of Labor campaigns — has added a layer of difficulty she did not create but cannot avoid owning.
VCN understands that internal Labor figures are divided on how to handle the reputational damage. Some believe the Premier should move more aggressively to distance the government from the union’s leadership and to demonstrate transparency, including through proactive disclosure of any cost-impact analysis the government has commissioned internally. Others argue that such moves risk inflaming tensions with the broader union movement ahead of a state election cycle.
What is not in dispute is that the current approach — declining to answer the cost question, offering process-based deflections, and waiting for federal administrators to do the work — is not landing well with either the press gallery or the public.
What comes next #
The federal administration of the CFMEU’s Victorian construction division is ongoing. Mr Irving is expected to produce further reports to the Fair Work Commission, which has oversight of the process. Those reports may — or may not — include assessments of the financial impact on government project costs.
Separately, Victoria Police has confirmed it is investigating a number of matters connected to the broader CFMEU scandal, though it has not publicly detailed the specific nature or scope of those investigations. No charges have been laid in Victoria in relation to Big Build projects at the time of publication.
VCN will continue to cover this story as it develops. If you have information about conduct on Victorian government construction projects, you can contact Crime Stoppers anonymously.
The matter involves ongoing investigations. All persons and entities connected to these matters are presumed innocent until proven guilty in a court of law.
If this story has raised concerns, the following services are available 24 hours a day, seven days a week:
- Crime Stoppers — 1800 333 000
- Lifeline — 13 11 14
- Beyond Blue — 1300 22 4636
- 13YARN (First Nations crisis support) — 13 92 76
