When Victoria’s Labour Hire Authority called an industry-wide meeting late last year, nearly half of the company owners under investigation by the regulator turned up.
Among them were some of the most colourful characters in the state’s construction, security and agriculture sectors, who were told they were unlikely to pass Victoria’s new definition of a fit and proper person. This would be easily provable, the authority’s commissioner Steve Dargavel said, because the authority had new search powers that would be used once the definition took effect later this year.
Dargavel’s audience was paying attention. Soon afterwards, the authority received a swathe of notifications from companies pre-emptively cancelling their licences. On top of this, 147 licences have been cancelled in the sector and 47 have been refused.
The meeting is illustrative of the increased efforts to clean up the corruption that has ravaged the industry and been exposed in detail by The Age’s Building Bad investigation since it kicked off in July 2024.
It also highlights the scale and complexity of that battle, responsibility for which ultimately falls to Premier Jacinta Allan. Between the CFMEU ructions and the need to respond to the Bondi terror attack, she now faces a decision that could reshape Victoria’s anti-corruption regime.
As Dargavel tells The Age, there is still much to be done.
“Ultimately, we need to be in a better place, and we need to enlist people’s participation in getting into a better place,” he says.
“It’s good to be transparent with everyone, including people you’re dealing with at the tougher end of your regulatory stick.
“This is what it looks like, this is what your future looks like. It’s a lot easier to treat people respectfully.”
This weekend, Allan will consider whether her government needs to use the forthcoming parliamentary sitting week to try and neutralise a saga that has bruised her government at the start of an election year.
Just months after bolstering the Labour Hire Authority’s powers, she is considering how to reach a face-saving solution to demands from Coalition, Greens and crossbench MPs to empower Victoria’s corruption watchdog to follow taxpayer dollars to subcontractors and labour hire companies, where much of the wrongdoing is concentrated.
Her decision will dictate the tone of the sitting week, influence separate policies such as key anti-vilification legislation, and determine whether damaging caucus leaks can be put to bed.
The Age has spoken to a dozen MPs, staffers and officials – each on the condition of anonymity to detail internal deliberations – who have given a picture of where the premier’s thought process may land.
The immediate issue for Allan is how to respond to an amendment with majority backing in the upper house that would give the Independent Broad-based Anti-corruption Commission (IBAC) follow-the-money powers, enable greater access to public hearings and change the definition of corruption.
The first two of these reforms were recommended by the parliament’s integrity and oversight committee in a December report which the government has until the middle of the year to respond to.
The amendment was attached to a broad-ranging omnibus bill, which included laws about bestiality while also removing the requirement for the Office of Public Prosecutions to approve criminal anti-vilification charges – a reform promised by Allan after the Bondi terror attack.
It appeared set to pass the upper house in the last sitting week, which forced the government to delay a vote on the bill – rather than opposing the IBAC overhaul – which may now come to a head again next week.
As recently as Monday, multiple Labor MPs believed Allan was unlikely to budge on her plans to respond to the committee recommendations in June, arguing that integrity reforms had significant consequences that could not be rushed through parliament.
“We need to consider that report appropriately because these are serious matters,” she said on Tuesday.
This could mean delaying the omnibus bill again – an option neither Labor nor the Coalition are fond of following the Bondi massacre.
But as the week wore on, signs emerged that the government was open to a compromise. Multiple sources said the government was canvassing ways to introduce follow-the-money powers while pledging to consider further reforms down the track.
One minister said increased public hearings were discussed, but unlikely, while retooling the definition of corruption could be referred for more policy work because it would have the broadest consequences. This would mean that even with increased powers, IBAC would only be able to use them for investigations which reached a high bar such as suspected criminality.
“In theory you wouldn’t see a massive change to IBAC’s investigations, but whether that is true is at the heart of whether we make any changes next week or not,” the minister said.
The Coalition has pledged to introduce its own bill if necessary, but has committed to work with the government if they will agree to act on these powers quickly.
A Labor MP told The Age that politicians on both sides of the aisle were deeply concerned about IBAC being weaponised for political purposes if reforms were not done properly. One of their colleagues agreed, but acknowledged there was an element of self-interest at play in keeping the watchdog’s powers limited.
Two Labor MPs said they now believed the government would make some sort of announcement to stem the political damage from the issue well before the government’s initial June deadline.
However, they said ministers would probably have to wait until cabinet meets on Monday to know where Allan and Attorney-General Sonya Kilkenny had landed. Negotiations with upper house MPs were being handled by the premier’s inner circle.
The Allan government’s response to the latest damning allegations about corruption on taxpayer-funded projects, detailed in Geoffrey Watson’s report for the CFMEU administrator, has become a significant burden for the government and the premier’s own standing.
Most Labor MPs who spoke to The Age said they were even more concerned about leaks from caucus in an election year, including reports from the ABC that some ministers were supportive of a royal commission. Even the few MPs who think a royal commission would be helpful do not believe the government will ever call one.
MPs accepted the government had a shocking week because of the CFMEU scandal and were frustrated by the recalcitrant response to Watson’s report. But they rejected any assertion Allan’s leadership was under threat.
“You can be unhappy with the response and still back the premier 100 per cent,” one said.
In a sign of the strain the saga is putting on caucus solidarity, an unplanned meeting of Right MPs on Wednesday of the last sitting week sparked a flurry of phone calls from those in the Left.
Neither the CFMEU nor Allan’s leadership were discussed at any point in the meeting, and it was unrelated to the events of the week.
The next morning, as reports emerged of internal support for a royal commission, Allan threatened to abandon a press conference when a reporter suggested she was “looking disinterested” amid questions over the saga.
As the premier contemplates her next move, the rest of the building industry has been put on notice.
On December 17, the leaders of the state’s Tier 1 contractors were summoned to the Labour Hire Authority’s office for a dressing-down about corruption in the state’s Big Build.
Among the attendees were the state’s infrastructure tsar Kevin Devlin, Suburban Rail Loop Authority chief operating officer Megan Bourke-O’Neil, Lissa Zass from Industrial Relations Victoria, and superintendents from the Australian Federal Police and Victoria Police’s Taskforce Hawk.
The construction bosses were read the riot act, according to sources familiar with the meeting, and told they would have to go much further in fighting corruption on major projects.
Some contractors left feeling offended that they were being lumped with the responsibility. One person in the room said they felt wounded by the experience.
Dargavel is diplomatic about the meeting. He told The Age it outlined the “expectation to principal contractors about their integrity obligations”.
“Agencies highlighted the regulatory, law enforcement and commercial consequences for construction companies who fail to meet their obligations in relation to integrity,” he said.
Fair Work Commission chief Murray Furlong was also more than happy to lay the boot in at the meeting. Although his comments were directed at Tier 1 contractors, they also serve as a timely advice reminder for Allan and her government.
In a copy of his speech seen by The Age, Furlong said that by the time regulators and law enforcement arrived on site, the damage was done and investigations could take 12 to 18 months. Court proceedings take years.
“By the time this occurs, the project is completed and the damaging conduct that occurred several years ago on your sites becomes a passing headline,” he said.
“But the conduct manifests again and again on new projects, somewhere else in the state.”
Furlong demanded the private sector match the efforts of CFMEU administrators to clean up the industry “outside-in”.
“Where are your ideas and actions to improve your industry? Where is your leadership individually or as a cohort? Where is your visible commitment to make things better for the next generation, and our community more broadly?
“It is your responsibility to be brave in preventing the illegal behaviour from actually taking place on your sites any longer – it needs to stop.
“You need to stop walking past it.”
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