Victorian Premier Jacinta Allan has dismissed growing demands for a royal commission into alleged corruption within the state's $100 billion Big Build infrastructure program, asserting that "inflationary pressures on projects is not corruption."
Allegations of Union-Linked Cost Overruns
The push for a royal commission follows an investigation by Nine newspapers and 60 Minutes, which reported claims that funds from the Big Build were being funneled to gangland figures. The investigation also revealed that the state government was warned about cost blowouts linked to demands from the Construction, Forestry and Maritime Employees Union (CFMEU).
According to Nine's Building Bad investigation, infrastructure companies repeatedly alerted the Victorian government between 2022 and 2024 that CFMEU demands had inflated labour costs on the Metro Tunnel project. A leaked consortium's report estimated that labour costs were 22% above industry norms, with $196.4 million attributed solely to union-backed staffing requirements. The report detailed how contractors were forced to hire additional non-productive workers.
Premier's Defense and Response
Speaking at a press conference on Monday, Allan stated she had not read the consortium's report. She argued that union members command higher wages due to "better" and "safer" working conditions, which contribute to project costs but do not constitute corruption. "That is a cost, but that is a cost that is about supporting those workers to do this work to deliver projects," she said.
Allan emphasized that "fair wages" for union workers are part of the inflationary pressures affecting projects like the Metro Tunnel. She rejected the notion that such pressures equate to corruption.
Ongoing Concerns and Political Pressure
The Nine investigation also revealed that money from the Big Build continues to flow to gangland figures despite a nearly two-year government effort to curb corruption. When questioned about whether corruption persists, Allan acknowledged the allegations but urged those with evidence to report it to Victoria Police. She maintained, "There is no evidence of government corruption on the Big Build."
Allan expressed confidence in the powers granted to Victoria Police and the Labour Hire Authority, noting that over the past two years, the authority had cancelled 164 construction industry licenses and police had laid 93 charges. "After all this time, if there is any evidence of any allegation of criminal behaviour that includes corruption and extortion, I don’t understand why that wouldn’t immediately be reported to Victoria police," she said.
Opposition and Calls for Inquiry
Victoria's opposition leader, Jess Wilson, asserted that Nine's reporting demonstrates "the corruption continues to happen today," with "payments continuing to underworld figures under premier Jacinta Allan’s watch." Allan resisted calls for a royal commission, describing it as "a call for delayed action" that would not bring about cultural change on work sites.
Victoria's former ombudsman, Deborah Glass, and former commissioner of the Independent Broad-based Anti-Corruption Commission, Robert Redlich, issued a joint statement urging a royal commission as urgently needed. Federal deputy opposition leader Jane Hume also called for a royal commission, referencing Queensland's inquiry into the CFMEU, and advocated for a funding pause on state infrastructure projects. "I do believe that you need to remove the corrupt elements before you can continue to give taxpayer money to these projects," she told ABC radio.
Allan dismissed Hume's call for a project halt, warning it "would see tens of thousands of workers put off the job immediately."
Financial Impact and Historical Context
A report by barrister Geoffrey Watson SC, presented during the Queensland inquiry in February, estimated that Big Build corruption involving the union had cost Victorian taxpayers up to $15 billion. The Allan government previously rejected this figure as "unfounded." In a recent interview with ABC's 7.30 program, Allan declined to provide an estimate of how much CFMEU corruption had cost the state.
The Big Build program commenced in 2015 following the election of the Daniel Andrews-led Labor government. It encompasses major road and rail projects, including the recently opened Metro Tunnel and the controversial Suburban Rail Loop.
