Victoria expands corruption definition and launches construction royal commission

Victoria's premier, Ben Carroll, has committed to changing the definition of "corruption" before the state election, a move a former anti-corruption boss says could have captured the conduct of senior government figures had it been in place earlier. The legislation will expand the jurisdiction of the Independent Broad-based Anti-corruption Commission (Ibac).

Carroll announced on Tuesday his intention to introduce the legislation before the government enters caretaker mode in November. He also said he was "very close" to releasing the terms of reference for a royal commission into the construction sector, which a special cabinet meeting approved on Thursday. The royal commission, headed by former South Australian Supreme Court chief justice Christopher Kourakis, has a budget of $50 million and a reporting deadline of August 20 next year.

The moves follow years of allegations of criminal infiltration of unions and building sites that dogged the government under former premier Jacinta Allan, who refused to call a royal commission despite internal pressure. Allan was the minister responsible for transport infrastructure when most alleged wrongdoing occurred. She apologised for the allegations but rejected calls for an inquiry, saying in June it equated to "a call for delayed action". Several MPs joined a cross-factional group that urged Carroll to challenge Allan for the leadership, and Allan stood down before a vote.

Terms of reference and criticism

The royal commission's terms of reference cover the executive level of government, the CFMEU, construction companies, labour hire firms and criminal actors. They have a broad focus on the causes, contributing factors and preconditions that allowed wrongdoing, while exempting lawful, legitimate and appropriate actions under industrial rules and occupational health and safety laws, except where these regulations were misused or abused.

Carroll said "anyone and everyone can be called" and described the terms as "the most comprehensive, broadest terms possible". However, Shadow Attorney-General James Newbury claimed, without providing evidence, that the government had explicitly ruled out certain behaviour of the CFMEU and that Allan and former premier Daniel Andrews would not be hauled before the commission. He also questioned whether the $50 million budget would be enough for the commission to do its job.

Anti-corruption barrister Geoffrey Watson dismissed the criticism as "absurd" and "incorrect". Watson, who has long advocated for a royal commission and estimated that $15 billion in taxpayer funding was wasted on Victoria's Big Build, said the terms of reference were "really excellently done", "very well designed, quite targeted, and sufficiently specific". He said it was unheard of to dictate witnesses for a royal commission and that doing so would affect its independence. Watson said the point of putting an estimate on the waste was to call for a royal commission, and he is confident it will do a great job.

Integrity bodies and business leaders broadly welcomed the terms of reference. A timeline for hearings and a witness list are yet to be established.

Broader anti-corruption reforms

The government is also moving to strengthen Ibac's powers. Currently, Ibac can only investigate suspected corruption that constitutes a relevant criminal offence and cannot make findings of corrupt conduct unless it constitutes a criminal offence. A parliamentary inquiry into Victoria's integrity framework, tabled in December, recommended lowering the threshold to capture "grey corruption" and other breaches of public trust, and giving Ibac the power to make and publish formal findings of corrupt conduct. The government accepted the recommendations in principle.

Special Minister of State Ingrid Stitt said her department had been working to "bring forward" follow-the-dollar powers, allowing Ibac to investigate the spending of public money by private contractors and subcontractors, alongside a broader definition of corrupt conduct.

Former Ibac commissioner Robert Redlich said the changes would bring Ibac jurisdiction closer to that of the NSW Independent Commission Against Corruption. He said the combination of a broader definition and follow-the-dollar powers would mean "no inhibitions" on Ibac investigating Big Build corruption. Redlich said the changes could have affected Operation Richmond, which was tabled in parliament earlier this month. Operation Richmond stopped short of finding corrupt conduct but found senior members of the Andrews government engaged in "serious and concerning" conduct, including "actions contrary to policy, procedure and codes of conduct, deliberate attempts to conceal and mislead, and the misuse of information".

Catherine Williams from the Centre for Public Integrity welcomed the reform prospect but warned Ibac would need additional resources.

Process and timeline

The royal commission follows a special cabinet meeting at 9am on Thursday, where ministers approved its launch and terms of reference. The letters patent will be delivered to the Victorian governor for approval after the meeting, with a press conference at midday. Carroll's first act as premier three weeks ago was to announce he would set up the inquiry.

A special prosecutor will be appointed to work in parallel with the royal commission. Both the special prosecutor and the expanded Ibac powers require legislation, which Carroll has committed to introducing before the government enters caretaker mode before the November state election. The Victorian parliament will sit for additional days to allow for this to occur.