Victorian Premier Ben Carroll has promised an “exhaustive” royal commission into the state’s construction industry, declaring that contractors, subcontractors, labour-hire companies, unions and government agencies will all face scrutiny over allegations of corruption, organised crime, violence and the misuse of taxpayer funds.
The inquiry represents the first major policy break between Mr Carroll and former premier Jacinta Allan, who repeatedly rejected calls for a royal commission before resigning amid a revolt by Labor MPs.
Mr Carroll said he had instructed the Department of Premier and Cabinet to begin developing the commission immediately, but its commissioner, budget, reporting deadlines and final terms of reference are yet to be announced.
“I want no stone unturned, whether it is top-tier contractors, subcontractors, labour hire, government, unions,” Mr Carroll said.
He promised terms of reference broad enough to examine conduct across the entire construction system rather than focusing only on the Construction, Forestry and Maritime Employees Union.
Mr Carroll announced the inquiry within hours of becoming Victoria’s 50th premier, declaring that “integrity will not be optional” under his government and that there would be zero tolerance for misconduct in business and the union movement.
The government will also establish a special prosecutor to work alongside the royal commission and bring forward proposed “follow-the-money” powers for the Independent Broad-based Anti-corruption Commission.
Those powers are intended to allow IBAC to trace public funds beyond government bodies and into private contractors, subcontractors and labour-hire businesses—areas where the watchdog has previously said its jurisdiction was limited.
Mr Carroll said the IBAC legislation would be introduced during the current parliamentary term rather than waiting until 2027.
A Victorian royal commission is established through letters patent issued by the Governor on the advice of the premier. Those letters define precisely what the commission can investigate.
Under Victoria’s Inquiries Act, a royal commission can compel witnesses to attend, require evidence under oath, demand documents, seek warrants to search premises and restrict the publication of sensitive evidence.
That makes the wording of the terms of reference central to whether the inquiry can examine government ministers, public servants, union officials, major contractors and networks.
Mr Carroll told Parliament the commission would deal with the allegations through “exhaustive terms of reference”, after the opposition questioned his previous responsibilities as the minister responsible for WorkSafe.
The Premier has retained the WorkSafe portfolio while leading the government, allowing the opposition to question what he knew about alleged conduct on constructing Ms Allan.
The royal commission will examine allegations connected with Victoria’s Big Build, a sprawling infrastructure program covering the Metro Tunnel, level-crossing removals, the West Gate Tunnel, the Suburban Rail Loop and scores of other transport and public works projects.
Since 2015, about $109 billion has been committed across more than 180 projects under the program. Several projects have faced major cost increase disputes.
Investigations since 2024 have alleged organised crime figures, outlaw motorcycle gang associates and corrupt operators secured access to construction jobs and contracts, while violence and intimidation were used to influence workplace decisions.
A report prepared by anti-corruption barrister Geoffrey Watson SC alleged there had been both individual corruption by union figures and more organised conduct involving elements of the CFMEU, motorcycle gangs and criminal groups.
Mr Watson also alleged highly paid Big Build positions became so valuable that some jobs were effectively bought through networks.
His report estimated that inflated costs and alleged misconduct may have cost Victorian taxpayers about $15 billion.
Mr Watson has acknowledged the figure is an estimate based partly on accounts that construction costs rose by as much as 30 per cent after the CFMEU expanded its influence over civil infrastructure work.
Ms Allan repeatedly disputed the $15 billion figure, describing it as untested, but her government did not produce an alternative.
Mr Watson welcomed the new government’s announcement, describing the prospect of a royal commission as “music to my ears”.
He said Victoria’s enterprise bargaining system had concentrated power among too few people and left major projects vulnerable to external influence and corruption.
Mr Watson has argued that only an independent inquiry with strong powers can determine how alleged wrongdoing became embedded across parts of the construction industry and why earlier regulatory systems failed to stop it.
Transparency International Australia also welcomed Mr Carroll’s decision but warned that public confidence would depend on whether the inquiry was genuinely independent and sufficiently broad.
Its chief executive, Clancy Moore, said a royal commission with coercive powers was required to uncover what occurred, identify those responsible and recommend structural reforms.
The organisation has been calling for an inquiry since February, arguing that allegations involving organised crime, inflated contracts and public construction projects could not be adequately addressed in reviews.
Former IBAC commissioner Robert Redlich said the commission was long overdue and described the construction controversy as an unprecedented public scandal.
He warned that any money lost through corruption or inflated construction costs was money unavailable for hospitals, schools and other public services—and would add to the burden carried by future generations of Victorians.
Mr Redlich said the inquiry’s effectiveness would depend heavily on whether its terms of reference allowed it to investigate the origins of the construction system established under former premier Daniel Andrews and continued under Ms Allan.
He argued that both former premiers should be available to give evidence if the commission determines their decisions are relevant.
Ms Allan was the minister responsible for major transport infrastructure for much of the Big Build’s expansion before becoming premier in September 2023.
She maintained that allegations of extortion, corruption and criminal conduct should be investigated by Victoria Police, IBAC and workplace regulators rather than through another royal commission.
Her government pointed to Victoria Police’s Taskforce Hawk, which had laid 93 charges by late June, and the cancellation of 164 labour-hire licences as evidence being taken.
Ms Allan also argued previous royal commissions into trade unions had failed to eliminate misconduct and risked being used to attack workers and reduce pay and conditions.
However, pressure for a broader inquiry grew inside Labor as further allegations emerged and opinion polls suggested the scandal was damaging the government’s chances at the November election.
The issue became one of the central factors in the leadership revolt that led to Ms Allan’s departure.
Mr Carroll has sought to make a clear distinction between his government and the administrations led by Ms Allan and Mr Andrews.
He said in his first statement as Premier, promising a different approach to integrity, public spending, and the businesses,
“I am not Daniel Andrews; I am not Jacinta Allan”
The royal commission is therefore both an integrity measure and an attempt to reset Labor politically with only four months remaining before the state election.
William Partlett, an associate professor of law and fellow at the Centre for Public Integrity, said establishing the inquiry could help Labor by signalling that the new Premier accepted something had gone wrong and was prepared to investigate it publicly.
However, he warned the commission should examine the entire construction sector without becoming a political exercise designed simply to demonise unions.
Professor Partlett said the inquiry should include private companies, unions, public institutions and government officials, and shouldn as possible. citeturn670088view2
Opposition Leader Jess Wilson has dismissed the announcement as potentially being a “fake royal commission”, accusing Labor of attempting to control the investigation before the election.
The Coalition released its own proposed terms of reference earlier this year, promising to investigate alleged links between CFMEU misconduct and organised crime, the cost to taxpayers and the responsibility of the Labor government.
Ms Wilson said Mr Carroll must establish the commission before the November election and ensure former and current Labor ministers can be called to give evidence.
She has specifically called for Ms Allan to appear, arguing the former premier was responsible for the infrastructure system allegations.
The government has rejected suggestions it intends to shield Labor figures, with Mr Carroll insisting no individual, company, union or government body will be excluded if relevant to the inquiry.
But major questions remain unanswered.
The government has not announced who will lead the commission, when public hearings will begin, how far back it will investigate, whether it will examine political donations or what protections will be offered to witnesses who fear retaliation.
It is also unclear how the proposed special prosecutor will operate alongside Victoria Police, IBAC, the union administrator and the royal commission without prejudicing existing criminal investigations.
The commission will need to manage the risk that public evidence could affect prosecutions or expose witnesses to intimidation, particularly given allegations of violence and threats within the industry.
Its terms may also need to address workplace safety, enterprise bargaining agreements, labour-hire licensing, government procurement, subcontracting arrangements and the flow of public money through multiple corporate entities.
Mr Carroll’s promise of an exhaustive inquiry has won initial support from integrity experts who spent months urging his predecessor to act.
Whether the commission meets that promise will depend on the letters patent, the person appointed to lead it and the willingness of the government to allow scrutiny of decisions made at the highest levels of Victorian Labor.
For the new Premier, the stakes extend beyond identifying wrongdoing.
The inquiry will test his claim that Victoria has entered a new political chapter—and whether Labor is prepared to investigate the construction system it created, funded and defended for more than a decade.
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