Setka stack fears as Greens stand to win big from Labor-union split

Union giant Bill Kelty has made an impassioned plea for Labor and union leaders to stave off a damaging and historic split, as blue-collar unions prepare to spend millions to hamper the Albanese government’s re-election campaign in marginal seats across Australia.

His intervention comes as Labor figures express worry about the long-term influence of the CFMEU, which before this masthead’s revelations about alleged criminality in its ranks signed up many union members to Victorian Labor to exert more influence over picking MPs and policy.

Construction unions are considering diverting donations from Labor to Greens and independent candidates.Credit: James Brickwood

Some union and Labor sources put the number at 400, but others caution it is lower. The precise number is unknown, but it is clear the CFMEU is placing people in the state’s grassroots membership.

Former union leader John Setka flagged in a private meeting of delegates in April, reported by the Australian Financial Review, that it would pursue this strategy to increase the union’s power in Labor’s decision-making forums.

Labor’s move to put the construction union into administration has triggered a full-blown revolt in the blue-collar segment of a union movement already grappling with corruption sagas in other unions, weakening Labor’s chief political support network before an election due by May.

Kelty, arguably the Australian Council of Trade Union’s most influential leader, acknowledged the difficult task political and union figures face in rooting out criminality at the same time as maintaining unity, but said they must put maximum effort into keeping the movement together.

“Don’t give up on this,” he said on Thursday, days after a group of two dozen union chiefs, claiming to represent 250,000 workers, flagged a split from the Australian Council of Trade Unions.

Bill Kelty was a key figure during the Hawke-Keating era.Credit: Justin McManus

“If there are big divisions and alternative organisations, that does damage to Labor and the union movement because it can’t present as one voice.”

Kelty, an ally of former Labor prime ministers Bob Hawke and Paul Keating, argued the Albanese government had to ensure the CFMEU was not destroyed for good as government-appointed administrators tried to clean up the organisation infiltrated by outlaw motorcycle gangs.

“This requires great care. Toughness combined with care,” he said.

The administrator of the union, Mark Irving, KC, is a former union lawyer, and several of his senior staff have union links, dulling claims that the government is interested in dismantling the CFMEU.

Greens leader Adam Bandt.Credit: Alex Ellinghausen

The Greens could emerge as a big winner from the dramatic falling out between Labor and the building unions, as they flag diverting donations from Labor to Greens or independent candidates.

Greens leader Adam Bandt was an industrial lawyer before entering parliament and has decades-long relationships with several union bosses. The CFMEU-aligned electricians union donated hundreds of thousands of dollars to Bandt when he won his seat of Melbourne from Labor in 2010, and the Greens have criticised the government’s tough response to bad behaviour in the union.

Union bosses at a breakaway meeting on Tuesday began talks about targeting vulnerable Labor seats in major cities, according to Victorian plumbers union head Earl Setches.

They could include Greens target seats like Wills in Melbourne and the seat of Perth, as well as Queensland Greens-held seats that Labor wants to win back.

Employment and Workplace Relations Minister Senator Murray Watt.Credit: Alex Ellinghausen

“The blind loyalty towards Labor is gone. Labor-held marginals should be worried,” Setches said.

Claiming safety standards were dropping on work sites, Setches added: “This is the biggest rift between Labor and the [unions] in my life”.

Labor campaign officials and a pollster, who did not want to openly discuss the ramifications of a rebellion, said big union money working against Labor could flip tight seats. But Kelty cautioned against doomsday scenarios.

“In terms of funding, they are substantial contributors, but money is money. It doesn’t determine the future,” he said.

“The Labor Party is down to 28-32 per cent of the vote anyway. I would think the majority of these tradespeople don’t vote for Labor. Whether this group vote for Labor or not is relatively minor in terms of votes lost.”

Industrial Relations Minister Murray Watt said he didn’t believe the splintering of unions would undermine the broader labour movement.

“From my point of view, we’re getting on with it,” he said.

“We’re getting on with the CFMEU administration, which is supported by the vast majority of the union movement and the Australian community, and we’re getting on with delivering better pay, more secure work, more gender equality and ensuring that people can keep their jobs, not risk being sacked under a Dutton government.”

“We obviously saw yesterday here in Melbourne, a small meeting of a small group of unions who don’t support the position of the ACTU and the government when it comes to the administration of the CFMEU.”

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.