CFMEU chief John Setka’s plan to turn Incolink into national fund

CFMEU chief John Setka’s plans for the workers entitlement fund come amid claims it will send businesses outside Victoria broke.

CFMEU chief John Setka is on the board of Incolink. Picture: Roy VanDerVegt

CFMEU chief John Setka has revealed plans to transform the Victorian workers entitlement fund Incolink into a national entity amid furious claims it will hike the cost of construction and send businesses outside Victoria broke.

The expansion of Incolink also represents a cash bonanza for the Victorian branch of the Master Builders Association which builders outside of Victoria are labelling “sellouts” due to its closeness to the Victorian CFMEU.

At a time of immense pressure in the building sector, the move doubles the cost to employers in the building industry outside Victoria from $81 to $160 per week per employee to cover the cost of redundancy and retirement benefits which will now be paid into Incolink.

Both Incolink and Mr Setka insist the transition of Incolink to a national model is a win-win for workers and employers and refute any lack of transparency over its disbursement of funds to the CFMEU and MBAV.

Incolink is Australia’s biggest worker entitlement scheme, holding $885m in funds under management, and gave $20.5m in the last financial year to the CFMEU and MBAV for “industry-based training”.

It is hailed by many in construction for its important work on safety, training, mental health, and its role in Victoria in delivering Covid vaccinations to building workers during the pandemic.

Others outside Victoria label it a “cash cow” for the CFMEU and the MBAV and are angry that non-Victorian firms and subcontractors will now have to pay twice the rate of payments to a wholly Victorian-managed entity.

The Incolink board includes Mr Setka, national Plumbing Trades Employees union boss Earl Setches and representatives from MBAV, Master Painters and Master Plumbers.

Its chief executive officer is Erik Locke, a former state secretary of the Victorian ALP and a senior figure in the party’s Socialist Left.

The former CEO of MBAV, Rebecca Casson, left the MBAV last December to become the new president of Incolink and was lauded by Mr Setka as “a highly skilled visionary on all aspects of construction operations”.

The first state to be absorbed into Incolink will be South Australia, where from July every new CFMEU-approved EBA in SA’s 82,000-strong construction sector stipulates that workers must now be covered by Incolink, a move which will kill the state entitlements scheme BIRST which has covered South Australian building workers since 1989.

The Australian understands that Mr Setka – who took over as secretary of the SA CFMEU last year – has a long-term goal of Incolink taking over other workers entitlement funds in WA and the NT as well as SA.

The move is causing huge friction within the Master Builders Association but, as a federated organisation, none of the states will comment, with SA chief executive Will Frogley saying only that he was aware that members in SA had “serious concerns” after individual businesses spoke to this newspaper.

Builders in SA have become increasingly alarmed about the conduct of the CFMEU since Mr Setka became its SA secretary last year, and are now also accusing the MBAV of “betrayal” in championing Incolink over BIRST.

“The more the CFMEU pressures employers to pay into Incolink, the more the CFMEU gets back for themselves,” one builder said. “So of course they are going to drive it up. Same goes for Master Builders Victoria – what a bunch of sell outs.”

Another SA builder said: “We don’t want Incolink here. But we’re damned if we do, damned if we don’t. We’ll be shut out of work if we don’t sign up to the union EBA.”

Another said the historically calm SA construction industry had been served well by its own redundancy scheme and there was no need to change.

“A redundancy scheme is a good thing if it benefits workers directly and money is only used for these purposes. This is pretty much how BIRST has operated for many years,” the builder said.

“I have a problem with my business effectively funding the Victorian CFMEU and having no idea what they spend it on.”

Mr Setka told The Australian the builders’ fears were “baseless” and “parochial”, and urged them to recognise the benefits they would receive shifting to Incolink.

“It’s going to become the biggest national redundancy fund and while it might be organised from Victoria in the end we are all Australians,” Mr Setka said.

“BIRST cannot compete because of its size.

“SA workers and employers deserve all the same bells and whistles that we enjoy in Victoria.

“It is all very clean with very heavy-duty auditing. We have been through two royal commissions and they haven’t been able to lay a finger on us.

“We have to spend the money we get on union members and we do that. Most of it goes on training. It’s made the industry safer.”

Mr Setka dismissed as “whingeing” SA business fears about the doubling of the weekly payments to $160.

“We would love to replicate Victorian wages and conditions in SA but we recognise that the economy is different there,” he said.

“But people need to stop whingeing and be realistic. We are in the middle of a cost-of-living squeeze everywhere.

“Every time we go for a pay rise you hear people say it’s going to be Armageddon, the end of the world.”

While MBAV declined several requests for comment, Incolink CEO Erik Locke said Incolink wanted to “work with” BIRST as it moved into SA.

“Incolink SA will be able to deliver services to employers and members that Incolink is renowned for: industry skills training; onsite health services; 24/7 counselling and an award-winning suicide prevention program,” he said.

“We have made a commitment to fund industry training in SA. All of this means that when our members face gaps in ­employment they not only have the financial supports available, but they re-enter the workforce faster and better prepared.

“We are happy to talk to any South Australian builder to reassure them, and introduce them to the thousands of satisfied employer members we have, many in South Australia.”

The federal opposition is ­demanding greater clarity around how money is distributed and spent, in line with calls from the 2016 Royal Commission into union governance and corruption for legislation to clamp down on worker entitlement funds.

Royal Commissioner Dyson Heydon said that unlike industry superannua­tion, entitlement funds operated with no requirement for annual reports, accounts to interested parties, or disclosures of fees, ­commissions and charges.

The Australian revealed ­earlier this year that Australian Electoral Commission data showed that union-linked ­entitlement funds have paid an average of $32m per year to unions between 2011-12 and 2021-22. This includes a whopping $189m to the CFMEU over the past 10 years.

Earlier this year the CFMEU was also forced to declare a direct $15m payment from Incolink to the Australian Prudential Regulation Authority.

Senate Economics Committee chairman Liberal Senator Senator Andrew Bragg said he feared the lack of scrutiny over entities such as Incolink.

“Industry estimates over $1bn is locked away in redundancy funds,” Senator Bragg told The Australian.

“They are unregulated and face no prudential supervision. In coming weeks I will be looking at how we can increase transparency and governance of the redundancy funds.”

The CFMEU has also spent a vast sum in SA promoting itself through a radio and display advertising campaign, now that the union is under Mr Setka’s control.

Mr Setka spent much of the past five years ousting the ­formerly moderate leadership of the SA branch whom he labelled “weak c...ts” who “deserved a good f..king” after he learnt that some SA construction workers were working over the Christmas-New Year period on a building project in the Adelaide CBD.

The arrival of Incolink in SA is a test for Premier Peter Malinauskas who has promised to watch closely any economic impact in SA caused by the CFMEU now being under Victorian control.

SA Labor was last year embarrassed into repaying a $125,000 donation it received on election eve from Mr Setka’s Victorian branch after CFMEU supporters vandalised cars at the state’s MBA headquarters.