Victorian Premier Jacinta Allan has pushed back against suggestions that union industrial disruption materially affected the North East Link's budget, despite documented complaints from the project's builders in March 2023 about work delays.
According to reporting from the Sydney Morning Herald, the consortium building the 10-kilometre project complained to government that CFMEU activity had pushed back tunnelling by as much as two months. Yet the Premier has maintained that such disruption played no significant role in the project's staggering cost trajectory.
The overall long-term budget for the project was set at $16.5 billion in 2017, but this increased to $26.1 billion as of 2023. When defending the blowout in December 2023, Allan attributed the increase to several drivers. She attributed the $10 billion blowout to several issues including changes to the project, rising construction costs, supply chain issues and the inflationary impact of global events like the pandemic and war in Ukraine.
The Premier's position reflects a broader tension between acknowledging union-related delays and attributing the project's fiscal damage primarily to external economic factors. Treasurer Tim Pallas said about 60 per cent of the additional costs came from the "deliberate decisions" by government on design changes to enhance the project, saying that was about making sure that we weren't running roads through communities where we could avoid it.
The question of CFMEU conduct's financial impact extends well beyond the North East Link. A recent corruption report alleged that the Victorian government was aware of growing corruption risks linked to CFMEU activity on major infrastructure projects but failed to intervene, suggesting officials feared industrial disruption and project shutdowns if they confronted unlawful behaviour. The clash centres on integrity lawyer Geoffrey Watson SC's estimate that alleged CFMEU-linked corruption may have added up to $15 billion to taxpayer-funded infrastructure costs over two decades.
Whether two-month delays on tunnelling constitute a material budget driver remains contested. Infrastructure economists and contractor representatives have argued that industrial unrest directly inflates labour costs and extends project schedules, compounding other pressures. Others contend that documented delays, however significant in construction terms, pale against the structural cost drivers: scope expansion, material cost inflation, and the premium paid for a public-private partnership model.
The 6.5km North East Link tunnels from Watsonia to Bulleen will fix the missing link in our city's freeway network, take 15,000 trucks off local roads a day and reduce travel times by up to 35 minutes. The project remains on track for a 2028 opening, though by early 2025, the Victorian Auditor-General reported the cost at $26.2 billion, reflecting a 67.6% overrun from earlier baselines and contributing to broader state infrastructure blowouts exceeding $11.6 billion across major projects in a single year.
The government's insistence that labour disruption did not blow the budget sits uneasily with the wider reckoning over CFMEU conduct and its fiscal consequences. Accountability requires separating which cost pressures were avoidable and which were inevitable. The March 2023 complaint from contractors suggests at least some delay was preventable, yet the Premier's framing leaves little room for assigning responsibility to union actions. Voters and taxpayers deserve clarity on which decisions and events drove which portions of the $16 billion overrun.