The Royal Commission into the Integrity of Major Public and Civil Infrastructure Construction Projects in Victoria was announced by Victoria’s Labor Premier Ben Carroll in August: his first act as the incoming premier.
Carroll’s announcement was a response to a years-long media campaign against the CFMEU, the main construction union. It was also part of a wholesale lurch to the right by an already neoliberal Labor government. And it is a blatant attack on any idea that unions should act to raise wages.
If proof is needed, just look at the first day of the current bloc of hearings. I attended the first day of the commission back in September and sat through the proceedings yesterday via livestream.
Literally the main point of yesterday’s hearing was how terrible it was that the CFMEU stopped a major construction job—the Gap Road level crossing removal in Sunbury—for a day and a half in June 2022, and that this resulted in traffic controllers winning an increase in wages from the award rate (at that time $26 per hour) to around $49 per hour.
The horror. This equates to a full-time wage of $1,862 per week, slightly above Australia’s average full-time wage of $1,835 in 2022. It’s an OK wage, though no king’s ransom. With allowances, shift and casual loading, and the plentiful overtime that construction sites run on, this can add up to a decent wage if you’re prepared to work long hours.
To listen to Chris Young, the counsel assisting the royal commission, a union winning this sort of wage for a blue-collar worker through industrial action in 2026 is a threat to all that is right in the world. So much so that two weeks of the royal commission’s rather expensive time is being devoted to investigating how this could possibly have come about, with the express intention of ensuring it never happens again.
Young spent yesterday sifting through the circumstances leading up to this supposed affront to decency. The CFMEU had a lot going in its favour.
Railway crossing removals happen on a tight timetable, planned up to a year in advance. The two companies doing the work—John Holland and CPB—wanted to deliver the job on time in order to secure further work. The labour market was tight in Victoria. The CFMEU had already been successful in securing enterprise agreements with most of the big companies doing this sort of work in Victoria. From the evidence led by counsel assisting, it sounds like the CFMEU judged the moment perfectly—just like any union which is serious about taking action to raise wages should, and historically has.
Both the CFMEU and the Australian Workers’ Union (AWU) cover workers working on civil construction projects like level crossing removals, and since 2014 the CFMEU has been trying to expand its coverage at the expense of the AWU. The Victorian Labor government at that time was uninterested in helping the AWU maintain coverage over these jobs—like Gap Road—and over traffic control work in particular.
This was a positive for the workers at Gap Road, and more broadly. The royal commission was told that Zoom Recruitment, one of the AWU-aligned labour hire companies providing traffic control at Gap Road, was operating on a long-expired enterprise agreement that paid only the legal minimum specified in the construction award.
This is utterly consistent with the business model of the AWU for the past century or more in construction, which is to undercut the wages and condition of the CFMEU and its predecessor unions. And to their credit, for most of that time, the CFMEU and their predecessors generally ignored the AWU’s claims to coverage on “civil” infrastructure work (roads, rail, bridges and tunnels).
The commission heard yesterday that the Labor government’s largely hands-off attitude to this demarcation dispute in 2022, which effectively favoured the CFMEU over the AWU, may have been because of factional alignments within the ruling Labor Party. This is hardly a crime, or even a novel tactic in Australian union politics.
The AWU has used exactly the same approach, of translating political clout in the Labor Party into industrial coverage (and vice-versa), for its entire existence. The conservative Shop, Distributive and Allied Union (SDA) follows the same path. The only difference is that the AWU and the SDA have an appalling record of lifting wages—in fact the SDA did the opposite, helping employers undercut legal minimums, until a path-breaking legal case in the Fair Work Commission a decade ago finally ended this multi-billion-dollar conspiracy to lower the rate of wages. No royal commission was ever called into the SDA, though.
The cost of the CFMEU’s success in their industrial action at Gap Road was a significant focus in yesterday’s royal commission hearing. On a project with a budget of $110 million, counsel assisting estimated that the union's actions led to an extra $6 million being spent. Nearly $4 million of this was in the higher wages paid to traffic controllers.
Given that the royal commission is costing about $1 million per week, it’s debatable whether the cost of investigating goings-on at the Gap Road project—two weeks of hearings and (at a guess) maybe the same time assembling evidence—is actually more than the extra wages paid. The Gap Road project was also delivered under budget, at $104 million, despite whatever extra cost was incurred after the CFMEU’s stop-work. Hardly the crime of the century then.
But of course, the actual concern being aired at the royal commission was that this success in raising the rate of wages would be successful beyond Gap Road. Counsel assisting led evidence that around this time, industry sources estimated that if the CFMEU was successful in their efforts to raise the wages (from the award or near-award AWU rates to the CFMEU rates) of every single traffic controller employed over the entire pipeline of infrastructure projects in the state, the total cost might pass $400 million. It wasn’t clear from yesterday’s evidence what the total value of these projects is.
Unions should be praised for winning higher wages on major projects. It’s bizarre, and a marker of how right-wing the whole environment is around the “big build” and the CFMEU is, that it’s at all controversial to say this. The storm of media coverage from the Age, and the royal commission that is the result, reeks of class prejudice. How dare blue-collar workers without a trade get a decent living! How dare unions raise wages in a cost-of-living crisis that the media would rather us all accept is intractable! This is the real “problem” at the heart of the media storm and the royal commission.
Geoffrey Watson has admitted as much. Watson is the man who made himself famous by inventing the figure of $15 billion in extra expenses that the CFMEU had allegedly added to Victoria’s $100-billion-plus “big build” infrastructure program. In a recent interview on radio station 3AW, Watson stated of this alleged cost overrun:
“A lot of it went into the hands of decent, hardworking people, who were getting paid at very accelerated rates. My problem with that was that too was a form of corruption in so far as it’s a misuse of public funds”.
“Conspiracy to raise the rate of wages” used to be a criminal offence, punishable by two years' jail with hard labour. To take action to raise wages from $26 an hour to $49 is apparently a “misuse of public funds”, an equally reprehensible crime in the eyes of some.
Watson is eminently qualified to know when a decent government-funded wage becomes a “misuse of public funds”. After all, this is the guy who (as the Australian newspaper reported in April 2016) “described his work at the Independent Commission Against Corruption, for which he earned up to $4,000 a day, as a ‘poorly paid living hell’”.
It wasn’t clear from yesterday’s hearings how much money anyone else—for instance, the giant companies John Holland and CPB—was making from Gap Road. The project was effectively delivered on a “cost plus” basis, with the state government paying construction costs plus a “reasonable margin” for corporate overheads and profits.
The implication of some figures presented yesterday was that this “reasonable margin” might be as high as 30 percent of the project’s total costs, which means the company made somewhat more than a traffic controller who had been lifted off the legal minimums. I’ll keep an eye out for evidence either way, but I won’t hold my breath—corporate profiteering from essential infrastructure construction doesn’t seem to be within the scope of the royal commission’s Gap Road investigation.
Much more of the focus in yesterday’s hearings was on the methods used by CFMEU organisers to stop work at the Gap Road site in June 2022. Rather than simply call a meeting and lead a walk-off, which might have left the union open to substantial fines, it’s alleged that union organisers used the legal cover of health and safety laws to gain access to the site and to log a series of safety breaches. While these issues were rectified, the organisers obstructed work by sitting or standing in particular parts of the site.
Counsel assisting noted that many of these safety issues were real enough. There were 11-metre-deep holes from the piling rigs, for instance, which didn’t have a mesh cover secured and had no handrails around them. Nevertheless, the real problem, according to counsel assisting, was the CFMEU.
It’s true that rigorous enforcement of health and safety regulations can be used as an industrial tactic. This is far from ideal: it’s a lot less transparent and democratic than the approach that was commonplace when I first started in the construction industry in 1999, which was meeting on site, discussing the issues, and voting whether to stop work. The reason health and safety concerns are often used to achieve an industrial outcome is that industrial action is illegal in Australia in almost any circumstance outside a formal bargaining round, which are usually spaced four years apart.
Management can sack union delegates, blatantly discriminate, and fail to abide by the enterprise agreement. But if a union dares to do more than file paperwork and pray for the best at Fair Work, and instead actually stops work, it faces the possibility of serious fines.
Unions in the UK can ballot for a strike at any time in relation to any work dispute. Workers in the viciously anti-union legal regime of the US have a sliver of legal space to hold an “unfair labour practice” strike when an employer wilfully violates a collective contract with the workforce. No such right exists in the legal regime introduced to Australia by Labor in the 1990s and tightened in the decades since.
Many of the labour movement’s proudest moments—the Green Bans of the Builders Labourers Federation in the 1970s; Zelda D’Aprano chaining herself to the doors of the Industrial Court in 1971 in a protest for equal pay; the 50-day strike of Victorian nurses in 1986 that ultimately led to the world’s first enforceable nurse-patient ratios; the strikes and mass pickets that supported the Maritime Union in 1998—these and countless lesser-known disputes would never have happened if unionists had followed the preferred path of counsel assisting, and slavishly observed the laws of the day.
One of the most offensive things about the media attacks on the CFMEU in recent years, and the royal commission, is they roll this type of legitimate and important industrial activity together with practices which should be driven out of the union movement—such as corruption and inviting criminal gangs into union structures. Socialists and other decent unionists have to reject both the corrupt and criminal tactics of some in the CFMEU and the bosses’ efforts to use these as cover to smear legitimate efforts to win wage rises and unionism in general.
Calling out the royal commission for what it is—an anti-worker disgrace—can’t mean uncritical defence of everything the leadership of the CFMEU ever did. In particular, inviting members of criminal gangs into union positions, including union delegates and health and safety reps, is a crime against principled unionism. A criminal gang is an absolutely ruthless capitalist enterprise. It’s a disgrace that such figures, some with zero industry experience, were parachuted into union roles while the Victorian CFMEU was under the leadership of John Setka.
Writing in 2024, when the CFMEU was first placed under the dictatorial control of an unelected, government-appointed administrator, I argued that the retreat of democracy within the CFMEU had happened over years, and was in large part the product of a siege mentality. Loyalty tests and secret deals replace organising, open debate, and frequent and open industrial action.
A siege mentality is not an entirely irrational response when the union is under an ever-tightening legal siege, and when industrial action is criminalised. But in the long term, it’s a dead end at best, or a road to disaster at worst.
A very different response to a siege is to try to break the siege. This would have to involve systematic organising and industrial action, involving wider forces. It would have to include a program of strikes in the finishing trades, where wages and conditions have been a basket case since the Howard government introduced its vicious anti-union Australian Building and Construction Commission in 2005, and which the current government-appointed administration has clearly done nothing to improve.
No-one should pretend this is a simple process. Quite the contrary. Construction workers face a difficult task in winning back control of their union. Not the least of these obstacles is the flood of manufactured outrage from Carroll’s royal commission.
