Daniel Andrews couldn’t spend our money fast enough. It is no surprise crooks cashed in

In Geoffrey Watson’s telling of how the Victorian “Big Build” infrastructure program transferred billions of dollars from the pockets of taxpayers into the accounts of hi-vis criminals, the barrister and anti-corruption campaigner poses an essential question: Why did the state government do nothing to stop it?

In seeking to answer his own question, Watson offers two theories in a previously redacted section of his “Rotting from the Top” report tabled last week in the Queensland government’s Commission of Inquiry into the CFMEU.

The first, which he rejects, is that the Andrews and Allan governments have run a protection racket for their Labor mates in the state’s largest construction union.

As Watson points out, by the time the level crossing removals, West Gate Tunnel and Metro Tunnel projects really got going, CFMEU boss John Setka and his cronies had fallen out with the Victorian government. They’d already found more useful idiots in Adam Bandt and his Greens, who as late as 2024 resisted the appointment of an administrator to clean up the union’s Victorian branch.

Watson’s second theory, which he leans towards, is that the Victorian government, like so many building companies, was too spooked by the risk of industrial action and costly project delays to act upon evidence of union malfeasance and corruption.

This is a big part of the story. When a premier or senior government minister plans their days around putting on a hard hat and spruiking a major project in an Instagram reel, they don’t want pesky interruptions from a picket line.

With due respect to the work Watson has done since he was appointed by the union’s administrator to investigate allegations of systemic criminality within CFMEU ranks, there is something missing from an otherwise compelling narrative.

A few years ago, a Victorian businessman responsible for managing a significant government investment privately expressed his exasperation at the cavalier indifference then premier Daniel Andrews showed towards the spending of public money. The businessman, who was no stranger to multibillion-dollar transactions, said he was personally offended by how little the Victorian government cared about the taxpayer’s dollar.

Andrews demonstrated this spendthrift attitude from the earliest days of its government. One of his first significant decisions after coming to power in November 2014, having promised to extricate the state – at no cost to taxpayers – from the previous government’s commitment to build the East West Link, was to spend $1.1 billion not building a road.

The previous Napthine government, as the auditor-general has pointed out, shares the blame for this. But for Andrews, disregard for public money became a defining feature of his decade in power.

To bookend this observation, consider one of the final decisions of the Andrews government – to spend nearly $600 million to not host an ill-conceived Commonwealth Games.

During the Baillieu and Napthine governments, total government expenses averaged $42.8 billion a year. In the first term of the Andrews government, government expenses leapt to an average of $78.8 billion – nearly double the cost of the previous administration.

By the time things got crazy with COVID, Victoria’s net debt had already doubled and the state’s infrastructure spend had started to explode. Our capital works program went from just under $5 billion in 2014-15 to a staggering $24.2 billion in 2023-24 and is this year running above $20 billion, a figure that distorts the cost and availability of labour and adds $12 billion to the state’s already massive borrowings.

We don’t need to revisit the tragic details of the Rudd government’s Pink Batts fiasco or the waste associated with the Morrison government’s JobKeeper program to understand what happens when a government is in such a rush to shovel money out the door. So long as you had a union ticket, the Andrews government was a scoundrel’s dream.

Premier Jacinta Allan, like CFMEU administrator Mark Irving, KC, does not accept Watson’s guesstimate that corruption added $15 billion to the cost of the Big Build. To be fair to Watson and Allan, it is not easy in Victoria to discern how much public money is actually being spent on major projects at any given time. This is by design.

In the latter years of the Andrews government, nearly 20 per cent of all government expenditure was accounted for outside the annual budget. Victoria remains the only jurisdiction in Australia, federal or state, where major projects are accounted for through the use of treasurer’s advances, a contingency normally reserved for emergency or unforseen expenses, instead of normal budget reporting.

The point has been well made that Allan, as a former minister for major projects, transport infrastructure and the Suburban Rail Loop, was responsible and should have been alarmed by unexplained costs on Big Build sites. It is less appreciated that the minister who actually signed the cheques to cover these unexplained costs, through treasurer’s advances, was Tim Pallas.

The scale of the corruption uncovered by this newspaper’s investigative journalist Nick McKenzie and catalogued by Watson demands a far more serious response than we have received so far from Allan. At the same time, the royal commission proposed by the opposition, while warranted, is not what Victoria most needs to prevent further corruption on Big Build sites.

As Watson notes, somewhat alarmingly, in another redacted passage from his report, corruption of this magnitude is a “uniquely Victorian” problem which, despite the removal of Setka and his buddies from the senior ranks of the CFMEU, remains deeply entrenched. “The influence of corrupting characters remains,” he warns. “Corrupt practices continue. There is presently no sign that things will improve.”

What Victoria needs now, above all else, is a government that values, safeguards and accounts for the money it spends. If only there was a way to put that in an Instagram reel.

Chip Le Grand is state political editor.

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