Australia’s criminal construction industry-

Unions and construction bosses are in ‘business together.

With the Australian federal election campaign well underway the aspirant Prime Minister Peter Dutton has declared that he will clean up the commercial construction industry. In essence his headline policy is to deregister the criminally corrupted construction union, the CFMEU.

Sorry. The policy is half arsed and won’t do the job. It’s simplistic and only addresses the outward appearance of the corruption, both commercial and criminal, in the commercial construction sector.

Aspirant PM Dutton’s policy doesn’t recognise or address the willing role of many construction firms in the ‘corruption’ process. These firms make money from the competition suppression that the corruption enables. This is the core of the problem. Failure to address this means that in removing the CFMEU it’s essentially a process of squeezing the corruption balloon at one end. The corruption will pop up at another end of the balloon.

I’ll explain this by describing to you how the commercial construction sector operates. From this hopefully you’ll understand how the corruption actually functions.

But first a reality check. Election analysis indicates that Dutton’s chances of winning government at the 3 May 2025 election is remote at best. For Dutton to win government the coalition needs to pick up 22 seats requiring a swing of over 6 percent. To do this would break historical election outcomes of the last five decades. Further, even with such a swing, chances of gaining control of the Senate are pretty much zero. So, Dutton’s policy is largely confetti in the political wind. Any chance of being able to implement is super remote. (But hey, maybe he’ll prove to be a political genius over the next few weeks and prove me wrong. Who knows!)

But let me return to my explanation. In this Substack post I’m summarising how the commercial construction sector operates as a ‘corrupt’ system. It’s bit of a ‘dry’ explanation but you might find it illuminating.

To start with, over the last several decades, Australian governments have conducted repeated inquiries, Royal Commissions into the commercial construction sector and tried different fixes, but the corruption remains. The criminality attracts media headlines, shock responses and commitments to ‘do something’.

Most recently the focus has been on criminality associated with and embedded in the CFMEU. This time this ‘something’ is investigation by the Fair Work Commission, the appointment of an administrator to clean out the union and the sacking of CFMEU personnel.

I’ve previously put the view that the appointment of the CFMEU administrator is actually about removing a threat from the CFMEU to take over the Australian Labour Party. But that’s another big story on its own.

Instead, here I argue that the focus on the CFMEU mafia style-criminality, although rhighly elevant, is like looking at the surface of a skin cancer and just cutting out the top layer of the cancer. In fact, the real and bigger cancer sits below. The real cancer is what makes the criminality possible and that’s all to do with commercial ‘deals’ between big business and the CFMEU.

The CFMEU (and through them their criminal links) are in fact in a ‘partnership’ of mutual self-interest with big businesses. Together they do ‘deals’ that corrupt competition and deliver control of the commercial construction market to select big businesses who have ‘friendly’ relationships with the CFMEU.

In short, to understand the CFMEU’s criminality it’s necessary to ‘follow the money’. I ask the simple but obvious question: Who benefits if the CFMEU puts a construction firm out of business (which they often do)? Answer: The beneficiaries are the defunct firm’s competitors! This doesn’t happen by ‘accident’. It’s embedded in the core design and operation of Australia’s commercial construction sector.

My perspective doesn’t just focus on demonising the CFMEU which is the common political approach. My perspective seeks to understand the bigger picture, the full cancer as it were. If the focus is only on the CFMEU, then ‘surgery’ will only address the outward signs of the cancer rather than cutting out the cancer itself.

The bigger picture. The cancer

The following is a description of how the Australian commercial construction sector operates.

Top-tier contractors: Commercial construction in Australia is controlled by a small number of top-tier firms. These firms win the bulk, if not all, of the contracts for the large multi-million and billion-dollar construction jobs. These include the big CBD skyscrapers and large industrial jobs (factories, warehouses and so on). The really massive money and profit, however, is in government infrastructure work (think Victoria Big Build and so on). These top-tier firms, however, rarely if ever directly employ any workers who work ‘on the tools.’ These firms make their money by being contract managers. They pass the ‘doing’ part of construction (actually building something) to subcontractors.

First-level subcontractors: There are several layers of subcontractors. This first level of subcontractors are often quite large businesses. They are specialist firms doing design, engineering, electrical, plumbing, contract form work and so on. Some of these firms directly employ construction workers who work ‘on the job’; some don’t.

Second-level subcontractors: Most work is passed further down the contract chain to other subcontractors. Typically, the workers who can be seen ‘doing’ things in hi-vis vests on construction sites are employed by smaller subcontractors where the ‘employer’ is frequently a ‘real person’ onsite supervising and working alongside their employees.

The ‘workers’: These are the people who actually ‘do things’ on construction sites. That is, they do the physical work.

How the CFMEU operates.

To all outward appearances the CFMEU exercises its power through the workers on the construction sites. The CFMEU can and does stop any worker entering a site who is not a CFMEU member. The CFMEU can at any time ‘order’ the stoppage of work, sabotage jobs and so on where ‘the bosses’ do not agree to CFMEU demands. It looks like and is intimidation. This is layered further with criminality where the CFMEU pays criminal gangs (bikies, ‘skinnies’ and so) to carry out enforcement. They will and do beat up people outside pubs. Often the criminals are direct CFMEU union employees. This is further layered when the criminal gangs traffic drugs to the highly paid construction workers (CFMEU members). This story goes on and on and has been given extensive media coverage into 2025.

But there is another key aspect to the CFMEU’s power that is not being covered. And in fact, it is the key to understanding the CFMEU’s power and its criminal involvements.

CFMEU marriage with top tier contractors

The CFMEU’s power is entirely dependent upon, and tied to, the top-tier contractors. It’s a simple dynamic.

Top-tier contractors have ‘relationships’ with the CFMEU where the CFMEU (unofficially) guarantees top-tier contractors that any job the top tier wins will be completed. This enables ‘CFMEU friendly’ top-tier contractors to win the big money-making construction jobs. Any company that does not have such ‘CFMEU relationships’ knows that it is a waste of time even bidding for big jobs. They will not win any jobs. This simple dynamic means that top-tier contractors operate as a cosy ‘gang’ where they share the available construction work between them. It’s all perfectly legal because this market manipulation operates under the cover of industrial relations.

The next part of the dynamic is also simple. When the top-tier contractors have a job, they ‘guarantee’ the CFMEU that all workers will be CFMEU members. The ‘guarantee’ operates like this. If first- and second-level subcontractors want to bid for and win work from top-tier contractors through the contract chain, they must undertake to enter CFMEU agreements and ensure workers are members of the CFMEU. Any subcontractor that does not do this will not win any work contracts. They are effectively excluded from the commercial construction sector. And this market exclusion is perfectly legal as it operates under the cover of industrial relations.

The final part of the dynamic is when a subcontractor or ordinary worker goes to enter a work site but is not a CFMEU member. For example, take a lone tiler with an apprentice who normally works in housing construction but picks up a commercial job. They go to enter the job site and will be blocked by a CFMEU official. On the surface it appears that the CFMEU official is acting as a criminal bully. The reality is different. The tiler will have gone back to the subcontractor and complained and asked what to do. Someone at the subcontractor’s end will quietly inform the tiler to either sign up to the CFMEU or leave.

• The reality is that the enforcement of the CFMEU membership is not done by the CFMEU itself. Rather it is accomplished through a cascade of management instructions that start from the top-tier contractors.

In this context the media attention about the CFMEU’s bullying, violence, criminality, gang association and so on is a distraction from the real problem—namely, the anti-competitive, market manipulation made possible through collusion between the CFMEU and top-tier contractors. But this is all legal because it operates under the cover of industrial relations.

Summary

In reality, an understanding of the corruption and criminality plaguing the commercial construction industry is easy to understand. The understanding happens when the penny drops that the CFMEU (and other construction unions) are not at war with ‘the bosses.’ Rather the unions and the bosses are in business together. That ‘business’ is the manipulation of the construction market through the suppression and elimination of competition. But it’s all ‘legalised’ through the industrial relations system.

Given the current political environment that protects this system, the situation is set to get worse, much worse.

My other writings are under the following groups

Modern Marxism Articles, posts looking at my deep study into the operations of marxists active in the Australian political and social scene.

Aust Work Issues : My study/commentary on the ‘revolutionary new labour laws of 2022-2024. Plus the strange happenings with the radical construction union the CFMEU.

ATO Reform : I describe the urgent need to reform the Australian Taxation Office.