Key facts
- Victorian Premier Jacinta Allan attributes Big Build cost blowouts to inflation, not corruption.
- Allegations suggest money from infrastructure projects may have gone to gangland figures.
- Contractors reportedly warned the government about inflated labor costs due to union demands.
- Calls for a royal commission into alleged corruption have been made by opposition figures and former officials.
- Allan stated that authorities have sufficient powers to address any wrongdoing and defended her administration's record.
Victorian Premier Jacinta Allan has dismissed calls for a royal commission into alleged corruption within the state's $100 billion Big Build infrastructure program, asserting that cost blowouts are due to inflationary pressures rather than illicit activities. This stance comes amid fresh allegations reported by Nine newspapers and 60 Minutes, suggesting that funds from the Big Build projects may have been diverted to gangland figures and that the government was warned about cost escalations driven by 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 labor costs on projects like the Metro Tunnel. A leaked consortium report, referenced in the investigation, warned of cost overruns reaching 22% above existing industry norms, with an estimated $196.4 million in labor costs attributed solely to union-backed staffing and the forced inclusion of non-productive workers. The consortium reportedly yielded to CFMEU demands with the Labor government's implicit backing.
Allan, who oversaw the Big Build program as minister from 2018 to 2023, stated at a press conference that she had not read the consortium's report. She argued that higher wages for union members, which come with better and safer working conditions, are a legitimate cost contributing to inflationary pressures. "Inflationary pressures on projects is not corruption," Allan declared.
The investigation also revealed ongoing alleged corruption, with money from Big Build projects reportedly continuing to flow to gangland figures despite government efforts to clean up the sector. When questioned about this, Allan urged those with evidence to report it to Victoria police, asserting, "There is no evidence of government corruption on the Big Build." She expressed confidence in the powers of Victoria police and the Labour Hire Authority, noting that the authority had cancelled 164 construction licenses and police had laid 93 charges over the past two years.
Victoria's opposition leader, Jess Wilson, countered that the reporting demonstrates corruption continues under Allan's leadership. Former ombudsman Deborah Glass and former ICAC commissioner Robert Redlich issued a joint statement calling for an urgent royal commission. Federal deputy opposition leader Jane Hume also advocated for a royal commission and a pause on infrastructure project funding, citing a similar inquiry in Queensland. Allan dismissed the call for a funding pause, warning it would lead to immediate layoffs for tens of thousands of workers. A report by barrister Geoffrey Watson SC, presented during a Queensland inquiry, estimated Big Build corruption involving the union had cost Victorian taxpayers up to $15 billion, a figure the Allan government rejected as unfounded.