A general view underground from the site of the currently being built, State Library station, as part of the Metro Tunnel metropolitan rail infrastructure project in Melbourne, Australia on Nov. 6, 2020. Asanka Ratnayake/Getty Images
Inflated costs caused by corruption in government infrastructure programs could significantly increase the cost of building a home, a parliamentary committee has been told.
During a parliamentary inquiry into productivity, Geoffrey Watson SC, who investigated corruption across multiple branches of the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU), said the impact will likely be felt well beyond the loss of taxpayer funds.
In February 2026, Watson’s Rotting from the Top report (pdf) was publicly released, detailing criminal infiltration and governance failures within the Victorian branch of the CFMEU, which was heavily involved in the state’s Big Build program.
The Big Build is a massive infrastructure program that has overseen the expansion and upgrade of Victoria’s transport network since 2015.
The program’s project pipeline is officially valued at $100 billion (US$70.2 billion), with the broader infrastructure investment framework worth up to $149.3 billion.
Watson’s report estimates corrupt practices inflated the cost of the projects an have left taxpayer’s with an extra $15 billion bill, a figure disputed by the state government.
Watson cited the cost of labour hire as an example, saying it increased significantly after the CFMEU became involved.
“I would see things where the labour hire, just as an example, could be $85.00 per hour to get a person on a labouring job was increased to $125.00 an hour,” he told the Select Committee on Productivity in Australia on July 29.
“Labour makes up, I think, 30 percent of the costs. Maybe sometimes 40 percent of the costs on major building sites.”
Watson said that while the CFMEU had limited involvement in the domestic housing industry, the union’s alleged corrupt practices still had a negative impact on the sector.
“I was told by the civil contractors they employed civil engineers, men and women who’d been at university for three years, acquired a degree, who were going to the building sites and were getting paid $85,000-$90,000 a year as a university graduate,” he said.
“Meeting the labourers who were getting $220,000 a year, so they’re dropping pins and picking up a hammer.”
The senior counsel noted that inflated labour costs on major building sites put pressure on housing developers to increase wages to retain employees, which ultimately pushed up housing costs.
“If you don’t think that there’s not going to be a knock-on [effect], there’s a house in my street being renovated at the moment, I reflect on this,” he said.
“How do they keep the labourers coming to that house when people on the major sites are getting so much more?
“This is where, when I talk about this thing costing billions of dollars, it’s almost immeasurable because it’s costing you more to have your bathroom renovated because of what was going on those sites in Melbourne.”
