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Victorian Labor government accused of enabling CFMEU corruption in Big Build projects

4 hours ago2 articles from 2 sources

Consensus Summary

Two Victorian news outlets report that leaked documents reveal the Labor government, led by Premier Jacinta Allan, was repeatedly warned between 2022 and 2024 about CFMEU-driven cost blowouts on the $100 billion Big Build, particularly the Metro Tunnel project. Contractors like the Cross Yarra Partnership (John Holland, Lendlease, Bouygues) documented how union demands inflated labour costs by 22%, adding $196.4 million to the Metro Tunnel’s budget. The government ultimately paid an extra $837 million to address these issues, pushing the project’s total cost to over $15 billion—triple its original 2008 estimate. Both sources confirm the CFMEU forced contractors to use handpicked subcontractors, often linked to gangland figures like Mick Gatto, and inflated workforces with non-productive roles. Allan has denied government corruption, attributing cost increases to inflation and fair wages, while opposition leaders and former officials call for a royal commission. The Age provides additional details on fake invoices, fraud, and internal government briefings, while the Guardian focuses on Allan’s public defenses and the lack of a corruption finding by police.

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Key details reported by multiple sources:

  • The Cross Yarra Partnership (John Holland, Lendlease, Bouygues Construction) warned the Victorian government in May 2024 that CFMEU demands inflated Metro Tunnel labour costs by 22% above industry norms, costing $196.4 million.
  • The Metro Tunnel project’s total cost exceeded $15 billion, more than triple the original 2008 estimate of $5.4 billion.
  • The Victorian government paid the Cross Yarra Partnership an additional $837 million in September 2024 to address CFMEU-driven cost blowouts.
  • The CFMEU forced contractors to use handpicked subcontractors and inflated workforces (e.g., extra crane observers, traffic controllers, cleaners) on the Metro Tunnel.
  • Premier Jacinta Allan was Victoria’s Big Build minister from 2018 to late 2023 before becoming premier in 2024.
  • The Southern Project Alliance (another Big Build consortium) also reported CFMEU-driven labour cost blowouts of up to 25% between 2022 and 2024.
  • Two firms named in the May 2024 report had Mick Gatto (a known gangland figure) on their payroll, and a third allegedly made corrupt payments to a union boss for preferential treatment.
  • The Victorian government has denied evidence of government corruption on the Big Build, stating inflation—not corruption—explains cost increases.
  • The Building Bad investigation by Nine newspapers and 60 Minutes first exposed CFMEU corruption in July 2024.

Points of Difference

Details reported by only one source:

The Age
  • Leaked documents from 2022–2024 show the government was briefed in late June 2024 (via Danny Pearson’s office) that Metro Tunnel productivity was lower due to industrial relations issues.
  • The consortium concluded the state’s role in industrial disputes ‘constitutes an act or omission’ requiring compensation.
  • Two CFMEU health and safety reps on the Metro Tunnel were later found to have issued fake invoices for shifts never worked (March 2025).
  • Schindler Group allegedly fraudulently claimed $6 million for Metro Tunnel escalator replacements.
  • Corruption-buster Geoffrey Watson called the leaks ‘smoking guns’ proving Labor enabled CFMEU rackets, estimating $15 billion in taxpayer losses (a figure Allan dismissed as ‘unfounded’).
  • Allan’s chief infrastructure adviser, Kevin Devlin, repeatedly raised concerns about union misconduct but felt they were ignored.
  • A high-level board estimated CFMEU lawlessness caused up to 30% cost blowouts on taxpayer projects.
  • The government offered ‘no mitigation’ assistance to the Southern Project Alliance despite warnings of CFMEU-driven cost increases.
The Guardian
  • Allan stated she had not read the consortium’s May 2024 report and claimed union wages with ‘better’ and ‘safer’ conditions justified higher costs.
  • Allan defended Victoria Police and the Labour Hire Authority’s actions, citing 164 cancelled licenses and 93 charges laid over two years.
  • Opposition leader Jess Wilson and former ombudsman Deborah Glass called for a royal commission, which Allan dismissed as ‘delayed action’.
  • Federal deputy opposition leader Jane Hume urged a funding pause on Big Build projects, citing Queensland’s CFMEU inquiry as precedent.
  • Allan refused to provide a specific figure for CFMEU corruption costs during an ABC interview this month.

Contradictions

Conflicting information between sources:

  • The Age reports Allan’s government paid $837 million extra to the Metro Tunnel consortium after the May 2024 warnings, while the Guardian does not specify this exact figure or timeline.
  • The Age states the consortium’s May 2024 report concluded the state’s role in industrial disputes ‘required compensation,’ but the Guardian does not mention this legal assessment.
  • Geoffrey Watson estimated CFMEU corruption cost $15 billion, a figure Allan called ‘unfounded’ in both articles, but the Guardian adds she refused to provide any alternative cost estimate in an ABC interview.
  • The Age details fake invoices and $6 million fraud by Schindler Group, claims not mentioned in the Guardian.
  • The Age reports Allan’s chief adviser, Kevin Devlin, felt his concerns about union misconduct were ignored, while the Guardian does not reference Devlin’s role or testimony.

Source Articles

THEAGE

They knew: Leaks reveal government ignored pleas on CFMEU conduct

Documents from some of Victoria’s biggest projects show contractors warned the union’s conduct was blowing out costs and deadlines. They were told to pay up and plough on.

27 June 2026
GUARDIAN

Victorian premier blames ‘inflation not corruption’ for Big Build cost blowouts amid fresh allegations

Jacinta Allan resists calls for royal commission into state’s infrastructure projects as pressure mounts following new reports Follow our Australia news live blog for latest updates Get our breaking news email , free app or daily news podcast Jacinta Allan has resisted growing calls for a royal commission into alleged corruption on Victoria’s $100bn Big Build, declaring “inflationary pressures on projects is not corruption”. It comes after an investigation by Nine newspapers and 60 Minutes repor

6 hours ago