A damning report that claims Victoria’s Labor government did nothing while a militant union’s branch became a crime syndicate is unfounded, Premier Jacinta Allan says.

But Allan would not commit to testing the allegations through a state royal commission or referral to the corruption watchdog.

On Thursday, she responded to allegations the state Labor government turned a blind eye to CFMEU corruption and cost taxpayers billions, a day after the explosive findings were released.

Barrister Geoffrey Watson SC’s findings alleged organised crime had infiltrated the CFMEU’s Victorian branch under former boss John Setka while the Labor government looked the other way for years.

Victoria’s $100 billion Big Build launched under premier Daniel Andrews was a catalyst for Setka’s CFMEU becoming a “violent, hateful and greedy rabble”, the report said.

Allan – the minister responsible for transport infrastructure during Setka’s CFMEU reign – said her government cracked down immediately once it was aware of union misconduct allegations in mid-2024.

“I want to make it absolutely clear that I and my government has zero tolerance for this alleged behaviour,” she said.

“Indeed during my time as minister when allegations were raised with me, I referred allegations to the relevant authorities.

“When the government was made aware of the widespread nature of this behaviour in mid-2024 we acted immediately to crack down on this rotten culture.”

The report said building sites became drug distribution points, criminals were hired and strippers were employed as stop-go staff as the Victorian government “did nothing”.

Allan said the allegations levelled at the Labor government were not “well tested or properly founded”.

She said she was deeply sorry to construction workers subjected to years of the union’s thuggish tactics, and slammed the use of strippers and drugs on work sites as disgusting.

“Those reports are absolutely sickening,” she said.

Pages from the report perceived to be highly damaging to the Victorian Labor government were initially redacted at the request of CFMEU administrator Mark Irving KC.

It prompted federal opposition calls for his sacking.

“I also want to make it clear that we support the work of the federal administrator,” Allan said.

“I agree with the federal administrator when he said yesterday that these allegations of widespread serious criminal behaviour are deeply concerning and disturbing and they need to be referred to the relevant law enforcement agencies for investigation.”

Shadow attorney-general James Newbury said the opposition would move for parliament to refer the matter to the corruption watchdog next week if it did not act on its own accord.

“This is the worst instance of corruption this state has ever seen,” he said.

Watson told a Queensland inquiry on Wednesday that criminality ran unchecked until the establishment of Task Force Hawk in July 2024, after the construction division of CFMEU’s Victorian branch had been placed into administration.

Watson said the Queensland branch had yet to plumb the same depths.

“The CFMEU under John Setka – the Victorian CFMEU – [was] a crime organisation,” he said.

“I do not see Queensland being anything like as bad … Victoria was completely out of control.”

-AAP