{"id":67480,"date":"2026-08-08T01:35:16","date_gmt":"2026-08-08T01:35:16","guid":{"rendered":"https:\/\/www.europesays.com\/australia\/67480\/"},"modified":"2026-08-08T01:35:16","modified_gmt":"2026-08-08T01:35:16","slug":"victorias-union-rot-ibac-report-exposes-secret-government-deal","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/australia\/67480\/","title":{"rendered":"Victoria\u2019s union rot: IBAC report exposes secret government deal"},"content":{"rendered":"

Victoria\u2019s Independent Broad-based Anti-corruption Commission <\/a>has spent eight years and some $8m discovering what Peter Marshall, the secretary of the United Firefighters Union, knew all along but repeatedly denied: that in April 2016, over four days of clandestine meetings in rented rooms and a hotel, he had struck a secret deal with the Andrews govern\u00adment from which the government\u2019s own emergency ser\u00advices minister was deliberately excluded.<\/p>\n

Bugged phone calls and text messages released with the Operation Richmond report <\/a>this week capture the mood. Once the terms were settled, champagne was raised for celebratory photographs; participants were told to keep the talks confidential but Marshall<\/a> later boasted that the deal had been sealed \u201cin a backroom\u201d with special minister of state Gavin Jennings and endorsed by premier Daniel Andrews<\/a> and cabinet.<\/p>\n

Jane Garrett, the minister cut out of her own portfolio, refused to endorse the deal and resigned from cabinet. She died in 2022; this week, her family said they remained proud of the stand she took. IBAC\u2019s report fully vindicates her. It found that Andrews, Jennings and senior public servant Tony Bates conducted the negotiations without regard for normal process or government policy, deliberately excluding Garrett and the Country Fire Authority.<\/p>\n

Nor did the favours Marshall<\/a> secured end with the 2016 agreement. IBAC found that when Lisa Neville later became emergency services minister, she gave Marshall privileged access and an opportunity to influence the choice of Fire Rescue Victoria\u2019s commissioner. It also found that Greg Sword, a Labor and union figure on the Metropolitan Fire Brigade\u2019s board, improperly passed him confidential information.<\/p>\n

None of that, IBAC concludes, meets Victoria\u2019s narrow legal threshold for \u201ccorrupt conduct\u201d, which requires behaviour capable of constituting a criminal offence. But a legal conclusion is not a moral exoneration.<\/p>\n

\"Bombshell<\/p>\n

The reactions since have been as revealing as the report itself. New Victorian Premier Ben Carroll, barely a fortnight into the job and little more than 100 days from an election, called the conduct \u201cintolerable\u201d and pledged to adopt every one of IBAC\u2019s recommendations. Bates, now secretary of the Education Department, immediately took leave.<\/p>\n

Marshall, however, dismissed eight years of findings as \u201ccreative writing\u201d, complained about the $8m spent investigating him and demanded that IBAC itself be investigated. <\/p>\n

That has been the union\u2019s reaction from the start. Its accounts record more than $4m in litigation costs over the two years to June 2025 as it fought repeatedly to prevent IBAC\u2019s findings from ever being published. Money collected from firefighters\u2019 pay packets has been spent defending the secrecy that allowed their secretary to wield outsized power. <\/p>\n

Far from protecting firefighters, protecting Marshall and entrenching his position has become the union\u2019s real purpose. <\/p>\n

Spread of the rot<\/p>\n

As for Andrews\u2019 successor as premier, Jacinta Allan, she showed no interest, as the scandal emerged, in protecting taxpayers and every interest in protecting herself.<\/p>\n

The rot that secret deal epitomises spreads well beyond Marshall and the UFU. The CFMEU\u2019s alleged infiltration of Victoria\u2019s Big Build<\/a> has cost taxpayers as much as $15bn, according to Geoffrey Watson SC: privileged, unaccountable access to public contracts, enforced by those most willing to use intimidation and standover tactics.<\/p>\n

Those crimes against taxpayers are symptoms of Victoria\u2019s desperate malaise \u2013 a malaise born of a government that stays in power today by ruining Victoria\u2019s tomorrow. As the size and cost of the public sector spirals, the state\u2019s balance sheet has gone from bad to worse. <\/p>\n

Since the election of the Andrews government in November 2014, Victoria\u2019s non-financial public sector has accumulated $192bn in fiscal deficits, with a further $50bn forecast in the government\u2019s own budget papers by 2030. The result is that non-financial public sector net debt already has exceeded 30 per cent of gross state product \u2013 the highest debt burden of any Australian jurisdiction.<\/p>\n

Debt can be good when it finances productive investment. However, Victoria\u2019s Labor government has developed a penchant for megaprojects that spectacularly fail any proper cost-benefit test but that provide endless opportunities for secret deals with unions. <\/p>\n

Exemplary is the monstrous Suburban Rail Loop, whose costs measure in the hundreds of billions and stretch far into the future. As I showed when it was first proposed, the project makes no sense. To proceed with it while ensuring vast numbers of employees work from home is madness.<\/p>\n

\"Dan<\/p>\n

With capital being wasted hand over fist and cosy arrangements with unions roiling management\u2019s ability to manage, Victoria\u2019s productivity performance has tanked. <\/p>\n

Its multifactor productivity now compares unfavourably even with Tasmania and South Australia and, more remarkably still, productivity levels have actually gone backwards since the Andrews government took office. And there are no prizes for guessing which jurisdiction has the highest unemployment rate in the land; at 5.1 per cent, Victoria\u2019s unemployment rate is more than 20 per cent higher than that of NSW at 4 per cent.<\/p>\n

However, that is not to say the problems are Victoria\u2019s alone. Labour productivity for Australia is barely above its pre-Covid average level over the period 2015-19, heavily weighed down by the collapse in non-market sector productivity this decade. <\/p>\n

More recently, labour productivity fell by 0.6 per cent in the March quarter and has barely increased over the past year. In fact, gross value added per hour worked is lower today than at the beginning of this decade \u2013 an extraordinary event by historic standards. We are a long way from the glory days of the 1990s when labour productivity grew by almost one-quarter in a single decade.<\/p>\n

Industrial relations is not the whole story but it is a significant part. During the reform era, the economic costs of our IR system were disguised by the stimulus to productivity the reforms brought. <\/p>\n

Union lawlessness<\/p>\n

That stimulus has now run out, while many reforms have been reversed \u2013 and, as the numbers show, the chickens have come home to roost.<\/p>\n

The point is that the UFU deal is no anomaly. For more than 40 years, Labor \u2013 federally and in the states \u2013 has fostered and protected union lawlessness under a bargain that could scarcely be simpler: Labor grants unions privileges that reward crooks and cronies; the unions use members\u2019 funds and organisational power to keep Labor in office.<\/p>\n

The Fraser government\u2019s Industrial Relations Bureau was created after the 1974-76 Sweeney royal commission exposed \u201cinexcusable\u201d payments extorted by the maritime unions. The Hawke government abolished it within months, putting nothing in its place.<\/p>\n

The conduct uncovered by the Costigan and Winneke royal commissions of the early 1980s was even more egregious. The Ship Painters and Dockers had become little more than a criminal syndicate, escaping deregistration only because its worst crimes \u2013 murder, malicious wounding \u2013 breached laws the industrial courts had no power to enforce. <\/p>\n

Norm Gallagher\u2019s Builders Labourers Federation held its grip on Melbourne building sites by breaking into workplaces, cancelling concrete pours moments before they were due and assaulting foremen, guards and \u201cscabs\u201d; its \u201cvigilante\u201d squads warned developers that prosecuting the culprits would bring savage retaliation.<\/p>\n

Each commission proposed reforms to clean up union governance. Instead, in a move exemplifying its response, Labor struck a \u201cgood behaviour\u201d agreement with the BLF so toothless the Federal Court called it \u201cmeaningless, unenforceable and unacceptable\u201d. Only once Gallagher became too embarrassing to ignore did Labor act \u2013 deregistering his union alone, leaving untouched the lax rules that had made his conduct so profitable.<\/p>\n

Little wonder the lawlessness resurfaced. The 1992 Gyles royal commission found practices \u201cranging from physical violence and a threat of physical violence at one end to petty pilfering at the other\u201d, producing \u201ca culture of the law of the jungle, with survival the object and short-term expediency the means\u201d. Union boss Tom McDonald dismissed the inquiry as \u201ca mere witch-hunt\u201d; Labor did nothing, and John Setka and the BLF\u2019s other hard men returned to power.<\/p>\n

The Cole royal commission then found the same \u201cdisregard by unions for the truth\u201d and \u201cfor industrial laws\u201d in an industry where figures such as Bruce Wilson and Ralph Blewitt flourished unchecked. ACTU secretary Greg Combet again called it a \u201cwitch-hunt\u201d; Labor\u2019s IR spokesman dismissed the watchdog it produced as \u201cnot a watchdog but an attack dog\u201d, \u201cprogrammed\u201d to \u201cinflame disputes\u201d.<\/p>\n

Unions\u2019 \u2018privileged position\u2019<\/p>\n

By the time Dyson Heydon\u2019s royal commission reported in 2015, the pattern was undeniable. Industrial relations, which Justice Henry Bournes Higgins once called \u201ca new province for law and order\u201d, had become, in Heydon\u2019s words, the province of \u201clouts, thugs, bullies, thieves, perjurers, those who threaten violence, errant fiduciaries and organisers of boycotts\u201d. <\/p>\n

The system, Heydon found, granted unions \u201ca privileged position\u201d without \u201cproper legislative measures to safeguard the interests of those affected by those privileges and the general public interest\u201d. Heydon himself was ruthlessly smeared and Labor blocked reform.<\/p>\n

Each time, Labor\u2019s script has been the same: deny there is anything to see; denounce the inquiry as a witch-hunt; then, once pressure becomes unbearable, sacrifice whichever individual has grown too toxic to defend \u2013 while doing nothing to change the system that guarantees the illegality recurs.<\/p>\n

The Marshall affair follows precisely that playbook. He remained UFU secretary throughout the eight years IBAC investigated him, despite the gravity of the suspected conduct. When the wider scandal could no longer be concealed, Allan flatly refused to call a royal commission; Carroll, who had vehemently opposed one, now says he will establish it \u2013 cutting Marshall loose to hang in the wind.<\/p>\n

Yet Carroll shows no sign of accelerating the legislation needed to give IBAC power to follow public money into Big Build subcontractors, where the dollars are far greater. The Allan government he served postponed that legislation until late 2027 \u2013 more than a year after voters go to the polls.<\/p>\n

All this degrades our public life into a rich-world parody of a tin-pot autocracy, leaving us mired in patronage and corruption that saps Australia\u2019s growth potential. The scandals change, the inquiries recur, individuals are sacrificed when necessary. <\/p>\n

But while the Andrews, Allans and Carrolls of this world remain in power, the backroom deals survive \u2013 and the rot with them.<\/p>\n

\"Henry<\/a><\/p>\n

Henry Ergas AO is an economist who spent many years at the OECD in Paris before returning to Australia. He has taught at a number of universities, including Harvard’s Kennedy School of Government, the University of Auckland and the \u00c9cole Nationale de la Statistique et de l’Administration \u00c9conomique in Paris, served as Inaugural Professor of Infrastructure Economics at the University of Wollongong and worked as an adviser to companies and governments.<\/p>\n","protected":false},"excerpt":{"rendered":"Victoria\u2019s Independent Broad-based Anti-corruption Commission has spent eight years and some $8m discovering what Peter Marshall, the 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