Barrister Geoffrey Watson SC, who prepared a report for the CFMEU administrator, put the cost of the alleged corruption at $15 billion. In his report he linked former boxer Mick Gatto to the CFMEU and to building companies involved in the state’s “Big Build” projects. Watson described Gatto as running a mediation business that can shut down sites and said he uses an “extortion model” with builders.

In June, Gatto and his wife were arrested during a police raid on their Mount Martha home. Police seized computers and phones, but the couple were later released without charge. The royal commission will examine whether taxpayer money has been paid to Gatto through his connections with the CFMEU and the Big Build projects.

If the commission finds that public funds have been diverted, taxpayers could face higher costs for infrastructure and the construction industry could see tighter regulation. The inquiry therefore matters both for protecting public money and for restoring confidence in Victoria’s building sector.