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An independent administrator will be appointed to overhaul the CFMEU following allegations the embattled union has been infiltrated by underworld figures.
Administrator to be appointed to CFMEU
CFMEU behaviour drives construction cost up 30 per cent, Dutton claimed
By Aoife Hilton
The opposition leader lamented that the CFMEU's bad behaviour accounted for a 30 per cent increase in construction costs and a decrease in productivity on building sites nation-wide.
"Hundreds of millions of dollars here are being misappropriated or misspent, and it's taxpayers' money," he said.
"And we know that there's a flow-on into the domestic housing sector as well."
"The fact is that Australians know that building costs have gone through the roof. Why? Well, in good part because of the practices of the CFMEU."
In the press conference, Dutton speculated that "we're only just scratching the surface" of the construction union's "thuggish behaviour" and "criminal conduct".
"My view is that this will turn out to be the biggest defrauding of the Australian taxpayer in our country's history," he said.
"We're talking here about tens or hundreds of millions of dollars."
Just last year, the Australian Tax Office reported savvy claimants had defrauded taxpayers to the tune of $557 million by exploiting a security loophole.
A government-commissioned review also released last year found doctors committing Medicare fraud and non-compliance were scamming taxpayers out of at least $1.5 billion every year.
Dutton characterised Albanese as a "weak prime minister" over his response to the CFMEU's behaviour, predicting the PM would respond similarly to other issues in future.
"It's going to be a Devillish government for as long as the prime minister continues to be weak," Dutton said in his press conference earlier today.
"The prime minister needs to stand up and act in the national interest — not in his own personal interest and the interest of the union movement more generally. "
Dutton compared the CFMEU to the Building Labourers Foundation, an organisation deregistered by the Hawke government in 1986.
"This is a carbon copy of what happened with the BLF," he said.
"Bob Hawke had the guts to stand up against the corrupt BLF, and we know that Anthony Albanese has not got any ability to show the leadership that Bob Hawke did."
The BLF was deregistered after a Royal Commission into the union. Its federal secretary Norm Gallagher was jailed for corrupt dealings at around the same time.
The CFMEU is facing allegations from Nine newspaper journalists, which have not yet been confirmed by police or the Independent Broad-based Anti-Corruption Commission.
Following the CFMEU's actions, Dutton pushed for the Australian Building Construction Commission to be reintroduced.
The ABCC existed from 2016-2023, and during that time was responsible for enforcing workplace relations compliance in the construction industry.
The Albanese Government transferred the Commission's responsibilities to the Fair Work Ombudsman in November 2022, and officially abolished the Commission in February 2023.
Dutton called Albanese's decision to appoint an administrator to the CFMEU the "weakest possible response" the PM could have made to the construction union's actions.
He called on Cbus to "extinguish their relationship" with the "corrupt" and "discredited" organisation.
He also called on the PM to deregister the union "if he had any backbone whatsoever".
"To have a corrupt union official, you need a corrupt boss as well, you need someone paying the money."
He says he wants that to stop and to be "weeded out."
"Whether it be in unions or in business, wherever it is it needs to be stamped out."
"What we don't want to do is punish Queenslanders or New South Wales people, or Victorians by stopping the work.
"Overwhelmingly, people who work in the construction sector, go to work, they work hard, it is dangerous work and they earn an income for their family and they make a contribution to building."
He says this can range from large homes to railway lines or roads.
"We don't want that stop, what we want is corruption to stop and inappropriate activity to stop."
When asked if anything about whether the Queensland branch will be launching a review itself, he said it already has been.
The prime minister reiterated that the administrators will be put into the branches of Queensland, NSW and Victoria.
"That has an impact on South Australia and Tasmania which are effectively run out of the Victorian branch."
Opposition leader Peter Dutton gave a press conference earlier today, where he said the CFMEU's actions were "public knowledge" and the PM's claim he never received a briefing on it "lacks credibility".
"The prime minister's known of the activities of the CFMEU for years and years. You've chosen to do nothing about it" Dutton insisted.
Workplace Relations Minister Tony Burke revealed the government would support the appointment, vowing to introduce legislation to clean up the organisation if the union opposed the move.
"I do believe these actions are best taken by the regulator, but any action to appoint an administrator will be supported by me as minister," he said on Wednesday.
But the minister stopped short of taking steps to deregister the union, saying it would allow it to operate without regulation.
"If we simply went down the deregistration path, we would have an organisation still capable of bargaining and doing the entire business model that we have been seeing reported over recent days with no layer of regulation or additional oversight that applies to registered organisations," he said.
Victorian union boss John Setka quit ahead of the revelations. After, the state branch was placed into administration and New South Wales Premier Chris Minns moved to eject the CFMEU — one of the most powerful factions within the Labor left — from the party.
Mr Burke described the the union's behaviour as "abhorrent" and "intolerable".
The CFMEU's national secretary Zach Smith declared on Tuesday that external administration of the union wasn't necessary and it could investigate the allegations internally.
In a statement, Fair Work Commission general manager Murray Furlong said he is examining if there are conflict of interest issues arising from Mr Smith "assuming multiple roles at the same time".
"I am deeply concerned about the alleged conduct and commentary that organised crime has infiltrated several state branches of the division, including that it appears to be embedded and ongoing," he said.
Mr Furlong is seeking advice on making an application to the Federal Court to appoint the administrator to weed out the bad actors and have the capacity to look at funding decisions.
Prime Minister Anthony Albanese said the administrator would take charge of the east coast branches of the union, including South Australia and Tasmania.
He insisted the government has acted "acted swiftly".
Labor and the broader union movement have been under pressure in recent days to explain what they knew about the CFMEU's alleged links to organised crime gangs that were revealed at the weekend.
Mr Burke denied any knowledge of the links, saying this was not something he had previously been briefed on.
"The organised crime issue – it was published as an exclusive – that's because this was new information," he said.
The Fair Work Ombudsman will undertake a targeted review of all enterprise agreements made by the Victorian branch of the construction division of the CFMEU that apply to Victorian big build projects.
Mr Burke has also written to Australian Federal Police Commissioner Reece Kershaw to request the AFP investigate the allegations and "work cooperatively" with state police.
But the Master Builders Australia said the government should also consider ordering an Australian Competition and Consumer Commission investigation.
Labor's national executive will meet on Thursday to discuss banning donations from the Victorian branch of the construction division of the CFMEU moving forward.
This follows requests from Victoria, New South Wales, South Australia and Tasmania premiers to suspend the construction division of CFMEU's affiliation with the state parties.
Opposition Leader Peter Dutton demanded the ALP stop accepting donations and that any funds still held by the party should be immediately quarantined
The Victoria, NSW and Queensland governments have said they will stop taking donations from the CFMEU.
However, Mr Burke said handing back donations would be "absurd" but said it was a decision for the national executive.
"The concept of handing money back is one of the most astonishing and absurd ideas I've seen. Are the Liberal Party seriously suggesting that at this moment the action of the government should be that we hand money to the CFMEU?" Mr Burke said.
"That's what they are arguing and I just find it … absurd."
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