Tim Wilson: Unpacking the CFMEU’s dark cartel kickback circle of life

Labor governments cannot keep dodging a formal inquiry into the cartel kickbacks and criminal conduct in construction that is pushing up prices for every Australian.

Last week was big for the Construction, Forestry, and Maritime Employees Union.

In The West Australian there was footage of CFMEU officials intimidating traffic management workers and forcing their way onto sites.

Through forced right of entry, they intimidate business to push up prices which are then passed through to consumers and taxpayers.

And where forced entry persuasion doesn’t work, CFMEU muscle follows with the WA division under investigation for connections to organised crime.

The WA division probably learned the model from Victoria.

Last week in Melbourne it was revealed $10,000 brown paper bags were the entry price for former veterans wanting to work on Victorian Government Big Build projects.

Worse, it was later revealed as minister responsible for these projects, the now Victorian Premier Jacinta Allan, knew about this graft.

It is absurd, but it is now an ordinary part of the lives of Victorians that their Labor Government facilitates public money as cartel kickbacks for organised crime.

When the Albanese Government was asked what steps were taken to ensure Federal money hadn’t found its way into Victorian brown paper bags, they fell silent.

This comes off the back of the report from the national administrator of the CFMEU.

Mark Irving KC took over the CFMEU after the Albanese Government unleashed the the union by abolishing the Australian Building and Construction Commission.

In Irving’s most recent report he said he was working to ensure union “staff and delegates do not have allegiances to organised crime or bikies” and that some major firms need to do the same to protect themselves from the union.

This comes off the back of earlier efforts by the NSW branch to muscle its way onto large apartment sites so it could extract premiums on developments, push up costs and leave first homeowners with the bill.

Which was the experience in Queensland, where modelling has shown the influence of the CFMEU has pushed up costs for first homes by up to 30 per cent.

The only ones interested in cracking down on CFMEU corruption has been the Queensland Crisafulli LNP Government, which has called a commission of inquiry.

Yet despite the compounding evidence, no Labor government is following suit. There is a simple reason.

The problem is the CFMEU is enabled by a cartel that hides in plain sight. The cartel is enabled by State and Federal Labor governments, unions, industry super funds and corporates that have no choice but to play along. We are all paying the price.

As the Australian Competition and Consumer Commission explains, “cartel activities are an imposition on the entire community — consumers, taxpayers and businesses. The extra profits cartels generate are at the expense of everyone in the supply chain”.

The CFMEU used its muscle to extract premiums and favourable terms for their members and simply wouldn’t supply labour to worksites if they weren’t met.

If the project was for the government, taxpayers picked up the bill through inflated prices, and often at the expense of value, higher debt and future taxes.

If the project was private, consumers picked up the bill through higher prices.

Because of the stranglehold the CFMEU had, industry played along because the alternative was even higher costs. They were often knowingly, if reluctantly, complicit.

So were State Labor governments who insisted on CFMEU involvement. These governments then package up deals where the industry super funds that unions govern financed the same projects, insist on union labour, leading to a double windfall.

Unsurprisingly, those super funds finance unions through over-the-top marketing fees, and those unions donate to keep Labor governments in power.

Let’s call it the cartel kickback circle of life.

Don’t think workers get any benefit. It’s largely about those at the top getting to the front of the trough.

The CFMEU’s own reports show from 2019 to 2024 their officials got a 26 per cent salary increase, while construction workers’ real wages are going backwards nearly five per cent. The cartel tax is trickle up economics.

It explains why one of the first actions of the Albanese Government was to abolish the ABCC. It had the permanent power of the royal commission to stop the cartel. In NSW last week the cartel’s behaviour was linked to fire bombings at private citizens’ homes.

When in opposition, Federal Labor called for a royal commission into the financial services sector because banks charged fees to dead people. Surely one should be called into construction if there’s a risk the cartel could lead to dead people.

But they can’t, because know they’ll get caught up in it.

As the ACCC identifies “cartels that target the public sector extract extra costs that are paid by all consumers through rates and taxes”.

Kickbacks sanctioned by construction power cartels have a price. We are all paying it.

Tim Wilson is the shadow minister for small business, industrial relations and employment