Why Jacinta Allan is so exposed by the CFMEU scandal
The Victorian premier’s deep roots in the union movement place her on the front line of fallout from the scandal enveloping the CFMEU.
Jul 20, 2024 – 5.00amListen to this article11 min“What … wh ... wh ... what have you got that shows they were put to me in writing?” Victorian Premier Jacinta Allan stuttered when asked why it took her more than a year to respond to a whistleblower’s warning about CFMEU intimidation tactics on Victorian construction sites.
When Allan fronted the Monday-morning press conference, it seemed unimaginable her position as the premier and leader of the Victorian ALP could be questioned, but by the end of the week, it was being openly debated.
Allan’s private office has been frantically hitting the phones to Labor MPs to quell any signs of a political rebellion. “She seems nervous,” one Labor MP tells AFR Weekend.
Victorian Premier Jacinta Allan under pressure as she publicly responded to the CFMEU allegations this week. Darrian Traynor
Allan has announced a review, suspended the CFMEU from the Victorian ALP and any political donations, promised to toughen anti-bikie laws and referred the allegations to authorities, as she promised to “pull this rotten culture out by its roots”.
But her moves to get on the front foot of the widening CFMEU scandal, which has already led to the resignation of CFMEU boss John Setka, have failed to prevent more questions about how much responsibility lies with the Victorian government.
After holding power for 21 of the past 25 years, the Victorian ALP is pushing back against a growing perception that its approval from voters is implicitly linked to a massive Big Build construction program that is embedded with the militant union. At the heart of this government is a Labor premier with deep links to the union movement. Of all the senior Labor politicians around the country, Allan is the one who is most exposed by this scandal.
Prime Minister Anthony Albanese has been touched by it, as have NSW Premier Chris Minns and Queensland Premier Steven Miles. The PM has moved quickly to seek to install an administrator and have the Fair Work Ombudsman investigate CFMEU enterprise bargaining agreements. But Allan was the minister responsible for Victoria’s $100 billion Big Build; she was the one overseeing the contracts and on notice about the alleged violence and misconduct at the heart of the scandal.
New Resolve polling, conducted just before the CFMEU investigation broke, has put support for her government at just 27 per cent, its lowest level in years as growing debt, project blow-outs and cuts to roads and hospitals begin to hit home.
One Victorian Labor adviser says that although the scandal is unlikely to trigger any immediate challenge to Allan and her government, it has shaken the Labor faithful and broken the spell over the party cast by the Teflon-like Daniel Andrews.
Advertisement“[The Allan government] weren’t prepared for this, and it makes people think that it is amateur hour at 1 Treasury Place,” the insider says of the whistleblower’s warning. “It seemed like a massive failure by her inner circle and office.
“Andrews would have read that letter and gone through everything he’s ever received on the CFMEU. He would have been very well-briefed and prepared.”
Now, “every minister would be going ‘if there is an issue that blows up in my portfolio, I have no confidence these guys can protect me’. That’s what happens when you lose confidence in the premier’s office under such a centralised government,” the insider says.
Once Setka stepped aside, Allan became the highest-profile figure threatened by the CFMEU scandal, which was triggered by a series of explosive reports from The Australian Financial Review, the Sydney Morning Herald, The Age and 60 Minutes starting last Saturday.
This crisis presents perhaps the greatest existential threat the dominant Andrews-Allan government has faced in its 10 years in power.
First, the tactics employed by the CFMEU to benefit from Victoria’s Big Build were an open secret. Federal Court judge Justice John Snaden wrote this year that, since 2010, the CFMEU had contravened section 500 of the Fair Work act more than 170 times in no fewer than 50 proceedings.
Nick McKenzie has quizzed Victorian Premier Jacinta Allan after an investigation by this masthead, AFR and 60 Minutes sparked a construction industry crisis.
The major investigation into the CFMEU by the Financial Review showed Allan was presented with evidence of serious misconduct on Big Build sites 18 months ago, and threats of violence and unlawful conduct were captured on video and offered to authorities.
“I was not surprised at all … this has been around for decades. If you remember back to the days of the BLF, this is just another version of that,” says former detective inspector Ken Ashworth, who worked on Melbourne’s gangland murders.
AdvertisementThe Financial Review also reported last year that then-deputy premier Allan was briefed that the CFMEU had kicked an Indigenous firm off at least nine state infrastructure projects.
The Victorian Liberals formally wrote to Victoria’s corruption watchdog after the report and asked it to investigate.
“Big Build contains many large and small projects but because of the enormous aggregate scale is a zone of risk for procurement and other corruption,” they wrote.
The Independent Broad-based Anti-Corruption Commission wrote back only on June 21 this year. “IBAC has decided not to investigate or refer your complaint to another agency for investigation,” it wrote.
Former long-serving IBAC chief Robert Redlich has long warned the current framework does not allow the agency to effectively investigate so-called “soft” or “grey” corruption.
He says it is a “fundamental failing” and that it is the government’s responsibility to ensure contractual arrangements properly serve the public interest.
A CFMEU-authorised election poster spotted on a Melbourne building site.
Second, Allan tried again on Tuesday to deflect the blame from the government, saying she had referred a warning to the Victoria Police. The referral pointed to an “anecdotal” suggestion of a “small number of possible” incidents and expressly stated there was no evidence it was widespread or systematic.
As Victoria Police Commissioner Shane Patton responded: “It’s not the role of Victoria Police to go proactively delving into union conduct and procurement matters that occur with government departments.”
Andrews and Allan’s winning political strategy has relied on working hand in glove with the militant construction union. The relationship was perhaps best symbolised by the CFMEU posters on building sites across Melbourne before the 2022 election which labelled Andrews a “prick” but one who was “delivering for construction workers”.
AdvertisementThe Financial Review previously reported that union and industry sources claimed the CFMEU’s support was in response to the government giving the go-ahead for Setka’s union – traditionally running commercial building sites – to take charge of civil construction, traditionally the domain of Labor Right union the Australian Workers Union.
The relationship was also demonstrated by the private CFMEU lunch at Carlton’s Epocha restaurant exposed by the Financial Review and attended by Treasurer Tim Pallas and now-Deputy Premier Ben Carroll, after the union boasted that billions of dollars in work would flow to members and affiliated builders.
And it was shown when the Financial Review reported that Allan attended the funeral of Setka’s father Bob last August at St Leopold’s Croatian Catholic Church in Sunshine, outer Melbourne. Setka supporters including underworld identity Mick Gatto also paid their respects.
Just four weeks ago, AFR Weekend drove to Cheltenham on a Sunday to question Allan about Setka’s threats against the AFL. She refused to condemn Setka, as the PM and other premiers had done. After the press conference, Allan complained that we were “just keeping the story going”.
CFMEU Victorian secretary John Setka (right) and president Robert Graauwmans arrive at the Epocha restaurant for the private ALP fundraiser. Louis Trerise
Third, Allan’s deep union roots mean the electorate will consider the premier is compromised on the issue.
Labor insiders say Allan was originally advised to respond to the CFMEU scandal – speculation suggests by former premier Andrews – by expelling the CFMEU from Victorian Labor.
But an internal Labor revolt meant Allan decided to water down the response and to suspend, rather than expel, the CFMEU – a softer political step that would not have been expected from Andrews, as his swift response to the Adem Somyurek branch-stacking scandal proved.
Allan rejected suggestions that she could kick CFMEU members off work sites, saying it would be an attack on workers. “That’s not a plan, that’s an extreme attack, an extreme attack on workers, an extreme attack on jobs, an extreme attack on projects our growing city and state needs,” she said.
AdvertisementTo understand the existential crisis Allan faces, it helps to understand how much the union movement is embedded in Allan’s DNA. Her father Peter and grandfather Bill – a long-standing president of the Bendigo Trades Hall – shaped her political views.
Peter started as an apprentice at the original SEC in 1964 and worked in the industry for more than 50 years “until Jeff Kennett and the Liberals got their hands on [it]”, Allan told a Labor campaign launch in 2022.
Growing up in Bendigo, Peter was an electrician and Electrical Trades Union member and sub-branch secretary.
“Dad and his [ETU] mates had a saying, ‘If you don’t fight, you lose’,” Allan said at the Labor Party launch. “If we don’t throw everything at it, leave everything on the field, that’s exactly what will happen.”
As an arts student at La Trobe University, she became secretary of the ALP’s Bendigo South branch at just 21. After staffing stints including for Labor MP Lindsay Tanner, she was put forward for the Coalition-held seat of Bendigo East in 1999 and won as Steve Bracks unexpectedly swept to power over Kennett.
Jacinta Allan with husband Yorick and their dogs Maximus and Mindo at their home near Bendigo last year. Penny Stephens
There was a short-lived marriage in 2004 to Australian Workers’ Union organiser Ben Davis – who went on to become the AWU’s Victorian secretary – with Bill Shorten as best man. In 2012, she married former Labor adviser Yorick Piper, with whom she now shares two children.
Piper is a former Victorian official in the CFMEU, but in its forestry and manufacturing division, seen as a rival to Setka’s construction division. But he also worked closely with Michael O’Connor in 2009 and 2010 when O’Connor was national secretary of the CFMEU.
As a favourite within Andrews’ dominant Socialist Left faction, Allan was given some of Andrews’ biggest and toughest roles including minister for transport infrastructure, the Suburban Rail Loop and the later-cancelled Commonwealth Games.
Andrews broke from convention after his 2022 election win to install Allan from his own faction as the deputy premier, before anointing her as his hand-picked successor later that year.
AdvertisementFormer premier Kennett says the trade union pedigree of Labor, Allan and Albanese means they can’t be trusted to clean up this mess.
The Victorian Liberals – hopelessly beaten in the past three state elections – are preparing to move a no confidence motion against Allan, a political stunt that can only be pulled every four years, when state parliament returns on July 30.
Allan has to convince voters otherwise, and those who know her best say she won’t go down without a brutal fight. But as Andrews showed Victorians, holding power means being willing and able to cross friends and foes alike.
Labor insiders now wonder aloud whether she can put her government’s survival above her own ideology and allegiances, as Andrews repeatedly showed he was willing to do.
So far, Allan has talked tough and sought to deflect the crisis. It may not be enough to save her or her government.
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Patrick DurkinBOSS Deputy editorPatrick Durkin is Melbourne bureau chief and BOSS deputy editor. He writes on news, business and leadership. Connect with Patrick on Twitter. Email Patrick at pdurkin@copyright link
Gus McCubbingReporterGus McCubbing is a journalist at the Australian Financial Review in Melbourne. Connect with Gus on Twitter. Email Gus at gus.mccubbing@copyright linkLATEST IN FEDERAL
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