Labor's workplace relations bill, which promises to ease the Fair Work Commission's caseload and prioritise businesses with enterprise agreements in government procurement, passed the Senate with Greens support on Monday night.
In effect, this would shut out non-unionised employers from lucrative Commonwealth government contracts and create the same conditions that caused rampant CFMEU corruption in Victoria's $109 billion Big Build program, the Business Council of Australia warned.
Business Council chief executive Bran Black said the legislation raised a serious integrity risk that should alarm every Australian business and taxpayer.
"The federal government is using this bill to rewrite the rules for how public money can be awarded in this country, and we should not allow that to occur," Mr Black said.
"What we have seen play out in Victoria was facilitated by a system in which access to taxpayer-funded work, sites and subcontracting opportunities could be influenced by corrupt unions and preferred intermediaries.
"This bill creates an opening for similar conditions to emerge nationally."
But Workplace Relations Minister Amanda Rishworth said construction would be exempt from the new laws and businesses without an enterprise agreement would still be allowed to bid for government work.
"We know that enterprise agreements can drive up wages and can make sure that people get decent jobs and decent conditions," she said.
Organised crime and bikie gangs continue to allegedly infiltrate the state's major infrastructure projects through the CFMEU despite a two-year clean-up attempt, an investigation by The Age found.
Claims of extortion, violence and billions of dollars in bribery-inflated project costs have been made, with funds allegedly siphoned to underworld figures such as Mick Gatto.
Geoffrey Watson, the barrister who shone a light on the rogue construction union, joined calls for an urgent royal commission into corruption within the Big Build.
"That's the only way you're getting to the bottom of this," Mr Watson, the director of The Accountability Roundtable, said.
Premier Jacinta Allan on Monday rejected calls from anti-corruption experts Robert Redlich and Deborah Glass for a royal commission, instead blaming inflation on the cost blowouts for the Metro Tunnel project.
"Inflationary pressures on projects is not corruption. People know the cost of building things has gone up," she told reporters.
Prime Minister Anthony Albanese backed Ms Allan, saying any evidence of corruption should be taken to police.
"We of course have no tolerance for organised crime and it's appropriate that authorities take action," he told ABC TV on Monday night.
"We have put the CFMEU into administration, something that was not done by the former government at all."
The premier said a royal commission would cost too much money and take too long to make any difference.
She said allegations of construction sector illegality should be referred to police.
But Mr Watson, a veteran lawyer whose damning report into the CFMEU sparked Queensland's Commission of Inquiry into the union, said that was not enough.
"It's very difficult to bring corruption charges to trial. It's why they've been getting away with it for so long," he told AAP.
"The police are doing a good job, but their powers are inadequate to actually investigate and answer these sorts of really very difficult issues."
The barrister questioned the premier's reasons for pushing back against a wave of united expert opinions.
"There is no reason why not, except a sinister reason," he said.
"I just fear for the future."
Shadow attorney-general James Newbury called on Ms Allan to resign over her inaction despite prolonged corruption allegations.
"The only two groups in Victoria who don't know and accept there's corruption on the Big Build, are the Labor government, led by Jacinta Allan, and crooks," Mr Newbury told reporters in Melbourne.
