Squiz Shortcuts - The CFMEU

Your Shortcut to the CFMEU

The Construction, Forestry and Maritime Employees Union (known as the CFMEU) has been at the centre of some damning allegations over the past couple of weeks including corruption, links to organised crime, and standover tactics. So in this Squiz Shortcut, we’ll explain:

• what the union does

• the reasons it has come under scrutiny

• and why this scandal is such a big issue for the Labor Party.

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What is the CFMEU?
The CFMEU is one of the largest unions in Australia, representing around 120,000 workers across the fields of construction, forestry, and maritime jobs - so people who work as builders, carpenters, port workers, crane operators, and in some sectors of manufacturing.

What does it do for them?
It helps them negotiate fair wages, safe working conditions, and things like superannuation, holidays and safety training. It’s got the power to make those deals with big employers because of the large number of workers it represents. Workers pay a membership fee for the union to act on their behalf, which unions say is more effective than one person negotiating on their own.

Got it. Have unions been around long?
Yep, they’ve been a part of working life in Australia since the late 1800s when workers in the industrial era banded together to improve their situation. Union membership used to sit at around 41% but it’s dropped in recent years to 12.5% due to the banning of compulsory membership in some industries and the fact that our manufacturing sector has become a lot smaller because we make fewer things (like cars and clothes) than we used to. 

Are unions involved in government?
Yes. The Labor Party in Australia was formed by union representatives in the 1890s and one of its core principles is to fight for the rights of workers. That continues today and unions have a role in lobbying governments and shaping policy to benefit their members. 

Do they donate money towards that cause?
They sure do. Unions are a major source of funding for the Labor Party. In the last election, the CFMEU gave $1.9 million to Labor’s campaign.

Does that give them power over politicians?
Good question. Labor MPs are encouraged to have strong links to the union movement but the friendship is being increasingly tested - particularly by the CFMEU.

Why’s that?
The CFMEU is a powerful union that has agreements in place with big construction companies working on large government-funded building and infrastructure projects. The majority of their members are the ones mandated to do the work on those sites. And recent reports by Nine’s papers and 60 Minutes have revealed some pretty damning allegations about the goings on at those worksites by union delegates. 

What are the allegations?
They claim the boss of the Victorian branch, John Setka, gave high-paying union delegate positions to people with links to organised crime and bikie gangs, and those people were involved in huge government building projects like Victoria’s $100 billion Big Build road and rail program. The reports say there have been complaints on worksites of thuggery, intimidation, blackmail and threats of violence against employers. 

Has there been any fallout?
Yep. Setka has resigned as Secretary of the Victorian CFMEU branch but it’s important to note that he denies the allegations. More reports have since surfaced of corruption in other state branches, with claims of bribes being taken by union officials in NSW and complaints of bullying, blackmail and extortion in South Australia. 

How has the Government reacted?
The Federal Government has moved to put the CFMEU’s east coast construction divisions - except for the ACT - into administration and its state branches have been suspended from the Labor Party. Prime Minister Anthony Albanese has also said Labor won’t accept any more political donations from that division.

That’s a lot of money to kiss goodbye…
It is, but pressure on the PM to act has been building (pardon the pun) since it was revealed that letters detailing the corruption were sent to senior Labor politicians 2 years ago - including to his office. 

What has the Coalition said?
The Coalition has been arming itself with statistics showing the CFMEU’s alleged tactics on building sites are driving up house prices, which could cause a huge headache for the PM heading into an election year.

House prices are always a hot topic in Australia…
Yep, and the Coalition’s got figures showing that the high wages negotiated and the freeze-out of competition (and by that we mean other companies that aren’t union approved) on work sites have added 10% to the price of new apartments in Sydney and 30% to those in Brissie. 

Now you’ve got my attention…
Thought that might snap you awake. They’re the type of numbers that strike at the heart of millions of Aussies priced out of the housing market. And that’s not all... Senior figures in the building industry say the union’s involvement in major taxpayer-funded projects has added billions of dollars to the price tag of big road and rail upgrades - particularly in Victoria and NSW. 

Ouch - right in the hip pocket…
Sorry, it doesn’t get any better. The knock-on effect for smaller-scale projects like apartment and home builds is that there’s now a shortage of construction workers due to those big government projects attracting tradies at lucrative rates - and they can sometimes last for years and even decades. And if workers are available for smaller residential builds, they expect to be paid at the same rates, which, coupled with the rising cost of materials and high demand, drives up building costs and ultimately, house prices. 

What’s the CFMEU’s stance on all this?
The CFMEU has said it’ll put in place a Code of Conduct in response to the allegations that have come to light. National Secretary Zach Smith said the union won’t tolerate corruption, but he defended the right to negotiate salaries for members to provide their families “with a decent life,” saying, “I take criminality incredibly seriously. I am determined to stamp it out. But I will also never ever apologise for the important work this union does.” 

So what happens next?
There’s still a lot to play out in this story and it remains to be seen if anything will actually change on building sites.

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