Victoria gives $12m to CFMEU-aligned fund under scrutiny

Up to $12 million in taxpayer grants have been distributed to a union redundancy fund facing criticism for its relationship with the CFMEU and Master Builders Association of Victoria.

Freedom of information documents obtained by the state opposition show that since 2018, $12 million in state government money has been provided to Incolink, a $1.2 billion redundancy fund set up by the CFMEU that has come under scrutiny in the past eight months.

Master Builders Victoria board directors say the employer group is reliant on Incolink for solvency.Credit: Harry Afentoglou

In December 2024, a split emerged within employer group Master Builders after three board directors raised concerns that the organisation had become reliant on Incolink funding, and that this represented a conflict of interest in their bargaining negotiations with the union.

The Fair Work Commission is investigating this complaint within MBAV.

Incolink is the country’s largest provider of severance benefits to building and construction workers, having paid out more than $360 million in redundancy payments in the past financial year.

At the same time as the complaint from the MBAV directors, the fund has been under increasing scrutiny since a media investigation led by this masthead, Building Bad, revealed serious criminal conduct within the union, including on government worksites.

In February, the same directors wrote to the federal opposition alleging Incolink was unlawfully distributing money via safety and training grants to the union and Master Builders.

Incolink has publicly denied this and says these members can still claim their entitlements.

Detailed accounts of Incolink’s payments, obtained under freedom of information, show the fund provided $31.5 million in safety and training grants since 2018. Of that total, $9 million went to the CFMEU and $12 million went to Master Builders.

According to the FOI, $12 million of that money, or 37 per cent of the distributions, came from government coffers.

One of the documents included in the FOI shows that since 2018, the Allan government has approved the release of $10 million to Incolink through grants for “industry-specific occupational health and safety training across the commercial and civil building and construction sectors”. Another $2 million was approved in the 2023-24 financial year.

The flow of funds was first unlocked after Incolink contacted the Victorian government in 2018 because the fund was no longer able to fund this training itself after a deterioration in its investment returns.

But the government has continued to provide the grants even as Incolink’s position improved, releasing the additional $2 million in the same 2023-2024 financial year that Incolink Group reported a net profit of $81.5 million.

That year, their investment portfolio delivered a return of 9.3 per cent.

Opposition major projects spokesman Evan Mulholland said the grants amounted to backdoor payments to the CFMEU.

“The Labor government have been complicit in allowing the CFMEU to use major projects as a vehicle to line the pockets of the union with Victorian taxpayers’ money,” he said.

“We need a tough cop on the beat. A Brad Battin Liberals and Nationals government will establish a dedicated Construction Enforcement Victoria watchdog to finally stamp out corruption, extortion, and intimidation on our building sites.”

A state government spokesperson said construction was one of Victoria’s most hazardous industries and that the grants had funded training across 3500 employers to 4000 Victorian workers.

“We have implemented a rigorous governance framework with independent auditing to ensure the funding is used in accordance with the agreement,” they said.

When the CFMEU was placed under administration, government funding that would typically be distributed through Incolink was withheld until the administrator was set up.

The most recent funding arrangement required Incolink to contribute an equal amount and provide quarterly reports on the progress of the programs being funded. An annual evaluation report must also be produced by a third-party auditor.

Details of the taxpayer contributions come as the redundancy fund has faced repeated questioning over the money it has distributed to the CFMEU and Master Builders.

As the Fair Work Commission investigates whistleblower concerns into MBAV’s relationship with Incolink, the Australian Financial Review reported that the three directors behind the complaint have alleged improper use of members’ money distributed to the CFMEU and MBAV.

In June, the corporate watchdog announced it was considering regulating union redundancy funds such as Incolink because they now manage billions in entitlements and have extended their remit to also include benefits such as income insurance, sick leave and other forms of cover.

The Australian Securities and Investments Commission has previously exempted these funds from existing laws related to financial services licences and management of investments, which includes transparency requirements and standards for conduct.

A Master Builders spokesperson said their grant funding was governed by defined benchmarks, checks and independents audits.

“Funds are used solely for the purposes specified in each grant agreement,” they said.

“We are hopeful the Commission’s report will be finalised in due course and will reinforce confidence in MBV’s transparent and accountable management of funding.”

A Fair Work Commission spokesperson said it was examining whether MBAV or any of its office-holders had breached the Registered Organisations Act.

“The commission has sought the MBAV’s voluntary cooperation and assistance to provide information and documents relevant to the Inquiry, and the MBAV has done so,” they said.

“The commission will not be making any further comment on this matter, as it remains an ongoing inquiry.”

A spokesperson for the CFMEU administration said they continued to “work across a broad range of issues” at the union.

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