The Victorian premier will face mounting pressure in parliament this week over allegations that corruption involving the Construction, Forestry and Maritime Employees Union cost taxpayers up to $15bn.
The eye-watering estimate appeared in a redacted section of a report by corruption fighter Geoffrey Watson SC, which was tendered during a Queensland inquiry into the CFMEU last week.
The report centred on the CFMEU’s Victorian branch over the course of two decades, when it allegedly went from a union focused on workers’ rights to a “violent, hateful and greedy rabble” that “cultivated the company of underworld figures” and bikie gangs.
Here’s what to know about the report and the government’s view of it.
What did the report say?
Watson’s report, Rotting from the Top, commissioned by the CFMEU administrator, Mark Irving KC, alleged the Victorian branch “was no longer a trade union, it was a crime syndicate”.
Watson alleged it was a “uniquely Victorian problem”, thanks to John Setka’s leadership of the branch and the “money generated by the Big Build” – the state’s $100bn infrastructure program, which began in 2015 after the election of the Andrews Labor government.
As level-crossing removals, station redevelopments and the construction of the Metro and West Gate tunnels ramped up, so too did the union’s leverage. As a result, unskilled labourers were entitled to a “base salary of over $1,900 per week”, and even more once overtime and shift work were included. Such roles became “so lucrative” that “corrupt organisers and delegates bought and sold the jobs”, Watson alleged.
He also alleged CFMEU figures and outlaw motorcycle gangs infiltrated major projects, with some building sites “converted” into “drug distribution centres”.
How was the Victorian government implicated?
While the final report did not directly implicate the government, the Queensland inquiry released two chapters that had been redacted on the direction of Irving.
In one chapter, titled Government inaction on the CFMEU, Watson alleged the Victorian government “knew and had a duty to know” that corrupt union and underworld figures had infiltrated the Big Build but chose to do “nothing about it”.
He suggested government had been “cowed” by the CFMEU’s industrial might and its willingness to act outside the law.
In the other, Watson calculated an alleged $15bn impact on taxpayers.
A spokesperson for Irving said the two sections were removed “because he was not satisfied that they were well-founded or properly tested”.
What’s been the government’s response?
The premier, Jacinta Allan, labelled the report’s allegations as “sickening” and “disgusting” – but rejected the $15bn figure.
“This is a claim that the administrator has said is not well tested or properly founded,” she told reporters last week.
Allan has maintained she only became aware the behaviour was systemic as a result media reporting in July 2024, when she referred matters to the Independent Broad-based Anti-corruption Commission (Ibac). At the time, the federal government placed the branch into administration and Allan suspended the union’s construction division from the state Labor party.
Where did that $15bn figure come from?
Watson described the figure as a “very rough” estimate based on the opinions of “highly qualified stakeholders”.
Given the Big Build was worth roughly $100bn and industry sources told Watson that cost blowouts linked to CFMEU conduct ranged between 10% and 30%, he settled on an estimate of 15%, describing it as “not unreasonable” and “probably conservative”.
“From there the maths is simple – the leadership of the CFMEU has cost the Victorian taxpayer something like $15bn,” the redacted chapter reads. “There is another point to this – as will be seen, much of that $15bn has been poured directly into the hands of criminals and organised crime gangs.”
The Fair Work Commission’s general manager, Murray Furlong, later told Senate estimates the $15bn figure was “consistent with what I’ve heard from officials from the Victorian government”.
However, David Hayward, an emeritus professor of public policy and the social economy at RMIT University, said there “doesn’t seem any reason to believe criminality was as financially significant” as the redacted Watson chapters suggest.
He said overruns were largely due to increased materials and equipment costs, and issues at particular projects.
“What I don’t understand is why [Watson] went down the exaggeration path when he already established a strong case around corruption and criminality, and he really didn’t have to put an estimate in,” Hayward said.
The economist Saul Eslake said the engineering construction implicit price deflator – a measure of price growth used by Australian Bureau of Statistics – showed costs in Victoria went up by 36.8% between December 2014 and September 2025.
But this was lower than New South Wales at 37.4% and national figure of 41.7%.
“All the talk is that Victoria has become a much more expensive place to build and yet the data tells me a different story,” he said.
What’s happening now?
The Victorian shadow attorney general, James Newbury, wrote to Ibac on Thursday to request an investigation into Watson’s report and the redacted sections.
Then, on Sunday, the opposition leader, Jess Wilson, called for a royal commission and released proposed terms of reference that included investigating “the true extent” of the cost to taxpayers and “what premier Jacinta Allan and ministers knew and when”.
At parliament this week, the Coalition was expected to ramp up pressure in the upper house, where the government does not have a majority, moving motions for another Ibac referral, in support of a royal commission and to seek access to documents related to the allegations in Watson’s report.
On Tuesday, the premier said the opposition’s proposed royal commission was “all about clawing back workers’ wages” and “compromising safety and conditions on worksites”.
The Greens, meanwhile, planned to move an amendment to an exisiting government bill to give Ibac powers to investigate corrupt conduct by third parties and private subcontractors connected to government funding.
“Labor has handed billions of dollars in public money to private corporations and subcontractors, but Ibac doesn’t have the power to follow that money. That’s a major gap in Victoria’s laws,” the Greens leader, Ellen Sandell, said.
Newbury said the opposition would introduce “follow the money” powers if elected in November. But he said they wouldn’t support the Greens amendment.
Allan said she had “no announcements to make regarding Ibac” on Tuesday.
• This article was amended on 17 February 2026. A previous version used a former iteration of the CFMEU’s full name.
