The Victorian government is defending its handling of corruption in the state’s construction sector amid accusations, reportedly made as part of a major corruption investigation, that it was “cowed” by the CFMEU.
The claim, reported by Nine Newspapers, was made in the findings of an investigation into CFMEU corruption commissioned by the federal government.
The findings of the investigation by Geoffrey Watson SC are yet to be publicly released.
Mr Watson is reported to have found the Victorian government “knew about the rising problem — but it is equally clear that the government did nothing about it.”Â
Watson is reported to have found suggestions the government’s failure to act was due to the close relationship between Labor and the CFMEU was “an inadequate and unsatisfactory explanation”.
“A better explanation is that the government, just like the contractors, had been cowed by the combination of the industrial might of the CFMEU and its willingness to act outside the law,” he is reported to have said.
In his report, Geoffrey Watson SC is reported to have made findings critical of the Victorian government. (ABC News: Billy Cooper)
On Wednesday morning, Victorian Attorney General Sonia Kilkenny would not comment directly on the contents of the report, saying it had not yet been released.
However, she defended the government’s attempts to crack down on corruption in the construction sector.
“You can see from the actions we’ve already taken, when we acted really swiftly to eradicate this kind of rotten culture that was exposed in parts of Victoria’s construction sector,” she told ABC Radio Melbourne.
Watson alleges CFMEU collapsed into crime and corruption under John Setka
Mr Watson on Wednesday appeared before Queensland’s Commission of Inquiry into the CFMEU.
His redacted report into the union’s Victorian branch was tendered as an exhibit and released by the commission.
In it, he detailed allegations of crime, corruption, violence and extortion within the union.
The 136-page document alleged that under John Setka’s leadership, the CFMEU went from achieving great changes for working class Australians to a “violent, hateful and greedy rabble” that “cultivated the company of underworld figures” and bikie gangs.
“As a lifelong believer in trade unions, it was shocking to see so much crime, so much corruption, such a perversion of values,” Mr Watson wrote.
“The union was no longer the champion of the working class — the Setka-era CFMEU turned to looking after gangsters, standover men, bikies, heroin traffickers, and even killers.
“By the end of this investigation I have been left with the empty feeling that the Setka-led Victorian branch of the CFMEU was no longer a trade union, it was a crime syndicate.”
Mr Watson said in his report that the union went “badly downhill” when the Victorian Government’s $100 billion infrastructure program ramped up in 2015.
“The big money generated by the Big Build was at the root of the problem in Victoria,” he wrote.Â
“The temptation created by the big money proved too great.”
He accused the state government of inaction on issues emerging with the union.
Mr Watson said that after the union was placed in administration in August 2024, threats were made against the life of administrator Mark Irving KC.
He said threats were also made against ACTU secretary Sally McManus and the then federal Minister for Workplace Relations Murray Watt requiring both to employ personal security, as well as The Age’s investigative journalist Nick McKenzie.
“It is quite clear that the problems in Victoria were exponentially worse and far more dangerous than elsewhere.”
Mr Watson’s report he sought a response from John Setka and received the reply: “I warn you Watson you should hope you never cross my path.”
In his report, Mr Watson also estimated the actions of the CFMEU let to cost blow outs of 15 per cent, describing the figure as a “very rough” estimate.
Nine Newspapers reported that the sections of the report in which Mr Watson was highly critical of the Victorian government were removed by CFMEU administrator Mark Irving.
A spokesperson for the administrator told the newspaper the sections were initially removed because he “was not satisfied that they were well-founded or properly tested.”
The ABC has contacted the administrator for comment.
Attorney General Sonia Kilkenny defended the Victorian government’s actions on corruption in the construction ector. (ABC News)
Ms Kilkenny said the Victorian government did not contribute to the Watson investigation.
“The federal report — the Watson report — is not our report. We haven’t had involvement in its content,” Ms Kilkenny said.
“This government moved swiftly to establish the Wilson review and of course writing to the Chief Commissioner of Victoria Police and to IBAC referring those allegations for investigation.
“It proves we have zero tolerance, absolutely zero tolerance for this kind of conduct and this kind of illegal behaviour and we’re going to get on and eradicate this rotten culture which has been exposed in parts of our construction sector.”
The Wilson review was conducted by senior public sector bureaucrat Greg Wilson, who made eight recommendations in his final report, including the establishment of the new complaints body for the troubled sector, in December 2024.
Victorian federal Liberal MP and Shadow Industrial Relations Minister Tim Wilson said he had concerns about the apparent intervention by the CFMEU administrator in the Watson report.
“This is alarming and deeply concerning and every Victorian should be concerned about the conduct by the CFMEU, the Albanese government’s heads that they appointed to that body and whether taxpayer’s money is being abused,” he told ABC Radio Melbourne.
“It’s pretty distressing when the CFMEU head of the administration is trying to scrub those sections of the report.”