Government sowing the seeds of corruption with procurement-rigging legislation

Media Release: 24 June 2026

The federal government risks sowing the seeds of corruption at the Commonwealth level with legislation that would rig the government procurement process in favour of unions.

In a letter to Minister for Employment and Workplace Relations Amanda Rishworth, the Australian Chamber of Commerce and Industry (ACCI) says the government has not learned the lessons of the CFMEU’s exploitation of procurement.

“By handing more power to unions, this legislation is sowing the seeds of serious corruption at the Commonwealth level,” ACCI Chief Executive Officer Andrew McKellar writes in the letter.

Due to be debated in Parliament today, the Bill explicitly states when government procurement contracts or government grants are being decided, the process is to “preference” employers who have trade union agreements in order to “encourage increased participation in enterprise bargaining”.

“Of course, ‘preferencing’ businesses that have union agreements unavoidably penalises those businesses that don’t,” Mr McKellar said.

“This extraordinary measure would create a rigged selection processes for deciding government contracts and Commonwealth grants.”

The government’s procurement budget is $105 billion per year, and it also provides grants worth around $20 billion per year.  Almost one million employing businesses do not have union-endorsed agreements.

“The threat to withhold valuable government contracts and grants from businesses that don’t make agreements with trade unions would shift enormous power to union bosses, who know they’ll have businesses over a barrel,” Mr McKellar said.

“Non-union businesses will be faced with an invidious choice — continue to operate without a union agreement and face the loss of contracts and grants, or plead for a deal with a union boss who knows they hold all the cards.

Mr McKellar said the legislation showed the government had failed to heed the lessons of the CFMEU’s conduct nationwide.

Geoffrey Watson SC’s Rotting from the Top report on the CFMEU in Victoria found a $15 billion cost arising from the exploitation of government procurement processes.

“This legislation now risks exposing the Commonwealth to this same outcome,” Mr McKellar said.

“This will give licence to the CFMEU and other unions to be even more aggressive in exploiting procurement processes and mug the Australian taxpayer.”

Read the letter here.