Jacinta Allan has also questioned a damning report's claim that major project budget blowouts caused by CFMEU misconduct cost Victorian taxpayers $15 billion.
The Victorian premier on Thursday fronted the media for the first time since an explosive report alleged the CFMEU's Victorian branch under ex-boss John Setka became a crime syndicate while the state government did nothing.
Barrister Geoffrey Watson SC's findings claimed worksites became drug distribution hubs, killers were handed high paying jobs and strippers performed for night crews after organised crime infiltrated the union.
Mr Watson on Thursday said damage to the Victorian economy caused by CFMEU corruption could be everlasting.
He made the concession when quizzed about his report entitled Rotting from the Top, which named former union officials Setka and Joe Myles as malign influences, along with Victorian underworld figure Mick Gatto.
In his report Mr Watson wrote: "There will be many examples of Gatto's criminal conduct in this report.
"Gatto has damaged the building industry and damaged the Victorian economy - maybe permanently."
Asked at Queensland's inquiry into construction industry misconduct if that was hyperbolic, Mr Watson replied: "It's not at all".
Victoria's $100 billion Big Build under Premier Daniel Andrews was a catalyst for Setka's CFMEU becoming a "violent, hateful and greedy rabble" as the state government turned a blind eye for years, the report said.
Ms Allan was the minister responsible for transport infrastructure during Setka's CFMEU reign.
The premier on Thursday apologised to the state's construction workers for the "rotten culture that was in place", saying some of the report's allegations were absolutely sickening.
However, she rejected the need for a royal commission into CFMEU rorts or a referral to the state corruption watchdog.
Ms Allan said the state government cracked down immediately once it was aware of union misconduct allegations in mid-2024, and insisted all the CFMEU's "bad actors" had been removed.
"I want to make it absolutely clear that I and my government (have) zero tolerance for this alleged behaviour," she told reporters in a tense media conference.
"Indeed during my time as minister when allegations were raised with me, I referred allegations to the relevant authorities."
She also rejected the report's estimate that major project budget blowouts caused by CFMEU corruption had cost Victorian taxpayers $15 billion.
"This is a claim that the administrator has said is not well tested or properly founded, so let's be clear that is not a claim that has been substantiated by the administrator," 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.
But the deleted sections were unearthed and published by the Queensland commission of inquiry on Wednesday.
Victorian shadow attorney-general James Newbury wrote to the state corruption watchdog on Thursday to request an urgent investigation into Mr Watson's report findings and the deleted sections.
"The corruption uncovered to date is of a scale that makes it the worst seen in our country's history," he wrote in a letter seen by AAP.
The Victorian corruption watchdog was contacted for comment.
The fallout from the report came as ex-CFMEU official and bikie Joel Leavitt, 32, was arrested along with another two men on Thursday.
Detectives from a task force investigating criminal behaviour linked to the construction industry made the arrests over allegations a demand for $663,000 was made at a west Melbourne property on January 19.
Mr Levitt, a patched Bandidos member, was described as a "brutal criminal with a bad criminal record" in Mr Watson's report.
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