Victorian Premier Jacinta Allan is facing mounting pressure over alleged corruption in the state's $100 billion Big Build infrastructure program, with an integrity expert dismissing her claims that cost blowouts are solely due to inflation as "nonsense."
Allan rejects royal commission, blames inflation
On Monday, Allan declared that "inflationary pressures on projects is not corruption" after an investigation by Nine newspapers and 60 Minutes reported allegations that money from Big Build projects was being paid to gangland figures and that the state government was warned about cost blowouts due to demands from the Construction, Forestry and Maritime Employees Union (CFMEU).
Geoffrey Watson SC, a director of the Centre for Public Integrity and former counsel assisting the Independent Commission Against Corruption, who was appointed by the CFMEU administrator to investigate corruption allegations within the union, said solely blaming inflation was "nonsense."
"Inflation may have some sort of a role but it's a relatively minor one, and in any event standard inflation rates would have been built into the earlier estimates as they always are," Watson said.
Calls for royal commission intensify
Watson reiterated his calls for a royal commission, saying it was the only way to address the corruption. "It's time to stop making excuses and to address the issue," he said.
Nine's Building Bad investigation reported that infrastructure companies repeatedly warned the Victorian government between 2022 and 2024 that CFMEU demands had inflated labour costs on the Metro Tunnel. A leaked consortium's report warned of cost blowouts 22% above industry norms, estimating $196.4 million of labour costs were driven wholly by union-backed staffing and detailing how contractors were forced to add non-productive workers.
The consortium stated it caved to the CFMEU's demands with the Labor government's backing, according to Nine.
Allan defends her record
Allan, who oversaw the Big Build program as minister between 2018 and 2023 before becoming premier, said at a press conference on Monday she had not read the consortium's report. She argued that union members cost more because their wages came with "better" and "safer" conditions, and that "fair wages" were part of inflationary pressures.
Responding to Watson's assessment that he had not seen evidence of Allan holding herself responsible for alleged corruption, the premier said "he is wrong" and pointed to actions her government had taken. She expressed confidence that Victoria Police and the Labour Hire Authority had sufficient powers, noting that over the last two years the authority had cancelled 164 construction industry licenses while 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," Allan said.
Opposition and integrity figures demand action
Victoria's opposition leader, Jess Wilson, said Nine's reporting demonstrated that "the corruption continues to happen today," and that "payments are continuing to underworld figures under premier Jacinta Allan's watch."
Allan continued to resist calls for a royal commission, labelling it "a call for delayed action" that would not lead to cultural change on work sites. However, Victoria's former ombudsman, Deborah Glass, and former Independent Broad-based Anti-Corruption Commission commissioner Robert Redlich issued a joint statement saying a royal commission was urgently needed.
Federal deputy opposition leader Jane Hume called for a royal commission, pointing to Queensland's commission of inquiry into the CFMEU, and urged 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 halt, saying it "would see tens of thousands of workers put off the job immediately."
Cost of corruption disputed
A report by Watson, tendered during the Queensland inquiry in February, estimated Big Build corruption involving the union had cost Victorian taxpayers up to $15 billion. The Allan government rejected the figure as "unfounded" at the time. During an interview with ABC's 7.30 program this month, Allan refused to provide a figure of how much CFMEU corruption had cost the state.
The Big Build began in 2015 after the election of the Daniel Andrews-led Labor government and includes major road and rail infrastructure projects such as the recently opened Metro Tunnel and the contentious Suburban Rail Loop.
