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Jacinta Allan has defended to her cabinet her refusal to establish a royal commission into Big Build corruption despite new polling showing overwhelming public support for such a measure, including among Labor voters.
Resisting growing calls from integrity experts and a push within Labor’s own parliamentary ranks to establish an independent, well-resourced inquiry, the Victorian premier told a meeting of her front bench on July 6 that royal commissions were not an effective way to bring about cultural change.
Three sources who attended the meeting and are not permitted to publicly disclose what was discussed said cabinet debate was promptly shut down after a trio of senior ministers, Harriet Shing, Sonya Kilkenny and Steve Dimopoulos, spoke in support of Allan’s position.
A minister present at the meeting said the premier’s key message to colleagues was: “We have got to grind this out.”
Details of the confidential meeting emerged as Health Infrastructure Minister Melissa Horne publicly broke ranks with the premier on Tuesday, seeking assurances over “extremely serious allegations” that Allan only hours earlier repeatedly dismissed as baseless.
Horne wrote to the state’s infrastructure agency to seek assurances after this masthead reported that a senior public servant had been pressured to sack a company disliked by the CFMEU from a public hospital project.
The latest Resolve Political Monitor conducted for this masthead shows that seven out of 10 Victorians and nearly two-thirds of Labor voters support the establishment of a royal commission into alleged corruption and organised crime activity in the construction industry.
According to the survey of 1000 people conducted last week, 71 per cent of respondents support a royal commission, while only 7 per cent of people are opposed. Among Labor voters polled, 64 per cent supported and only 10 per cent opposed the establishment of an inquiry.
These figures are largely unchanged from three months ago, when Resolve last tested popular support for a royal commission following this masthead’s revelations about the involvement of bikies and organised crime figures in the CFMEU and on government-funded building sites.
In the April poll, 70 per cent of people supported the idea and 7 per cent were opposed.
Allan broached the issue of a royal commission at the start of last Monday’s cabinet meeting, when political matters are discussed before ordinary business. Four days earlier, this masthead reported growing support among Labor MPs for the Victorian government to establish a royal commission into Big Build corruption to take control of an electorally destructive issue.
Allan’s private arguments to her cabinet colleagues are similar to those she made directly to Age readers in a column published a week ago. She wrote that a previous royal commission focused on the CFMEU and other trade unions conducted by former High Court judge Dyson Heydon led to only one criminal conviction and failed to produce cultural change.
“If the goal is another report, another royal commission will deliver one,” she said. “If the goal is changing behaviour on worksites, changing the culture is the answer. Ask someone working on a construction site today, and they’ll tell you it is changing.”
Allan’s argument that royal commissions aren’t an effective means of bringing about cultural change was disputed by former federal court judge Ray Finkelstein, who presided over the last royal commission established in Victoria.
Finkelstein conducted the royal commission into Crown’s suitability to hold a casino licence established after evidence emerged of money laundering and gambling junkets linked to organised crime. It forced wholesale changes to Crown’s governance and practices and improved regulation and independent oversight of the casino’s operations.
When asked whether royal commissions were an effective way of changing a problematic culture, the former judge replied: “That is what they are intended to do.”
He cited, as an example, the “enormous” cultural shift in banks, superannuation funds and financial institutions caused by former High Court judge Kenneth Hayne’s inquiry.
“Those external pressures change cultures,” he said. “There is absolutely no doubt about it.”
Finkelstein’s inquiry took less than nine months from the time the letters patent were issued to the provision of the final report to the governor. He said that a royal commission into the Big Build would be able to quickly get to the heart of the problem.
“If there is misbehaviour going on, either people know about it and don’t do anything about it, or they don’t know about it when they should,” he said.
Former IBAC commissioner Robert Redlich, former ombudsman Deborah Glass and integrity experts from Transparency International and the Centre for Public Integrity have all called for a royal commission into Big Build corruption, and Victorian Opposition Leader Jess Wilson has vowed to establish one if she is elected to government in November.
The idea is fiercely opposed by the Building Industry Group of unions, which includes the CFMEU, the Electrical Trades Union, the plumbers’ union and the AMWU. ETU Victorian secretary Troy Gray is one of the premier’s most important industrial allies.
Horne’s letter to the Victorian Infrastructure Delivery Authority (VIDA), which she also posted to her Facebook page, is a rare instance of a minister breaking ranks with the premier. In the letter, she referenced “extremely serious allegations” that, only hours earlier, Allan dismissed as having “no basis”.
Horne’s intervention was in response to revelations by this masthead that the state government had pressured a senior public servant into sacking a plastering firm on a major hospital project because it had attracted the disapproval of the CFMEU. Former Victorian Health Building Authority executive director Stephen King described the incident on the Victorian Eye and Ear Hospital project as “absolutely inappropriate”.
Horne told VIDA interim director general Duncan Elliott the allegations were deeply concerning and neither she nor her office had been in contact with the CFMEU since she had taken responsibility for the portfolio.
“While this project was completed prior to my appointment as Minister for Health Infrastructure, and I was not the relevant minister at the time of the allegations, I seek your assurance that VIDA Health (as the successor to VHBA) has not directed the removal of any contractors or subcontractor on health infrastructure projects, except for where it has been legally permitted to do so,” she said.
Horne said the Allan government had created a dedicated complaints body for construction-industry concerns, strengthened the Labour Hire Authority and introduced new contractual arrangements to guard against conflict of interest and gifts.
But she sought advice on extra steps to “strengthen the oversight of subcontractors and key personnel on projects”.
“The Victorian public rightly expects that our health infrastructure projects are free from the influence of impropriety and corruption and, as minister responsible for the delivery of Victoria’s health infrastructure pipeline, my clear expectation is that these projects are delivered to the highest standards of legal compliance, probity and integrity, conduct and ethics.”
Earlier on Tuesday, Allan disputed the claims made by King about his time at the VHBA.
“There’s no basis for that claim,” she said. “My advice on this particular matter is that there was a dispute between the head contractor and a subcontractor.
“That dispute did not involve the government. That mediation process was resolved in a way that the parties ended up parting ways.”
Allan did not answer when asked whether the dispute between the head contractor and plastering subcontractor involved the CFMEU taking issue with the subcontractor.
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