Allegations Snowball at ‘Dysfunctional’ CFMEU

The construction and development industry is being “let down” by what it says is a lacklustre reaction to allegations of misconduct continuing at the CFMEU. 

The latest claims against the Construction, Forestry and Maritime Employees Union accuse members of threatening behaviour and corruption involving criminal gangs, particularly in regards to Victoria’s Big Build infrastructure projects.

According to reports from Nine newspapers and the 60 Minutes TV program, acts of physical violence and intimidation have been perpetrated against women by CFMEU members.

They also allege that criminal figures are “receiving payments from companies on public-funded projects looking to gain favour with union insiders”.

These claims followed reports this month about a company backed by the CFMEU and linked to Mick Gatto, a former Melbourne underworld figure and construction industry arbiter, defaulting on its taxes. 

M Group Trades and Labour reportedly owes $14 million in taxes, which prompted the Australian Taxation Office to file a notice with the Australian Securities and Investments Commission (ASIC). 

These are the latest in a long line of allegations against the CFMEU, not just in Victoria but across the country, which led to increased governmental scrutiny.

Initially surfacing in mid 2024, CFMEU members were accused of intimidation of rival union bosses and for having alleged links with organised crime figures at major Victorian and New South Wales construction projects.

▲ The allegations surfaced last year but industry insiders say it has been a pattern of behaviour for much longer.

The explosive claims led to the Victorian branch of the union being placed in administration.  

The Housing Industry Authority said that “more needs to be done to uncover and stamp out the unlawful behaviour that has been allowed to fester in the construction industry”.

“HIA members seeking to undertake commercial, multi-unit or government-funded work have cited concerns over many years regarding intimidation by the CFMEU and the influence they have on building sites,” HIA managing director Jocelyn Martin said. 

“This activity further constrains productivity and activity across the sector, including the residential building industry.”

She called out the Government for letting a “criminal and dysfunctional element … dictate the business environment for construction”. 

▲ Victorian Premier Jacinta Allan.

In reaction to the latest allegations, the Federal Opposition promised legislation modelled on the US Racketeer Influenced and Corrupt Organisations (RICO) Act 1970, which allowed prosecutors to charge entire mafia-related organisations rather than individuals. 

Victorian Premier Jacinta Allan declared that police resources would be deployed to investigate the organised crime allegations.

Calls have come from all sides for the Federal Government to reintroduce a watchdog like the Australian Building and Construction Commission, the closure of which was announced in 2022. 

“HIA echoes the calls to re-establish an industry watchdog,” Martin said, calling existing regulations “outdated and inadequate”.

“We also cannot simply assume that the problem only impacts large projects,” she said. 

“This behaviour is impacting costs and value for money throughout the industry as builders who offer more cost-effective options are not able to secure contracts for work such as school renovations because they do not have a relationship with the union.”

The outcome of an expected federal election this year will no doubt determine the nature of the crackdown on the CFMEU going forward.