Deregistering CFMEU would be a 'disaster': union boss

The Victorian and South Australian branch of the union have been placed into administration by the national office after allegations of criminal behaviour and bikie gang links, with the claims to be independently investigated.

The allegations have led to calls for the union to be deregistered, but its national secretary Zach Smith says that would be a retrograde step.

"Deregistration would be a disaster for workers," he told ABC radio on Tuesday.

"What deregistration means is that workers lose their representation overnight on issues like safety and wages and conditions.

"This is a dangerous, precarious industry and the last thing you want is workers to be left vulnerable and without representation, without protection in an industry like ours."

Mr Smith said the union was more than capable of investigating itself, rather than appoint an independent investigator, and union members were entitled to the presumption of innocence.

"External administration and further interventions of the government isn't necessary. You're jumping ahead and trying to pre-determine an inadequacy of the response here when administration just occurred yesterday," he said.

"This process that I'm starting, will have an independence ... it won't just be me. I'm working through the mechanisms now."

The national secretary also defended the controversial former head of the Victorian branch John Setka, who resigned on Friday following the allegations.

Mr Smith said Mr Setka had not shamed the union.

"He made a decision on Friday to step aside because he thought it was the best thing for the union the best thing for the members of CFMEU. That speaks to his integrity and credibility," he said.

Victoria's Labor government has moved to suspend affiliation with the union and political donations following the allegations.

One federal Labor MP, speaking on the condition of anonymity because they were not authorised to discuss internal party matters, questioned whether the party should cut ties completely.

Emphasising people's fears about speaking out publicly against the union, the Labor MP said they also wanted to remain anonymous because they did not "want to wake up next to a horse's head".

The ordeal was a distraction and the labour movement was "sick and tired of the CFMEU", they said.

"About f***ing time. They're not very nice people," they said.

They accused the national executive of turning a blind eye and raised concerns CFMEU members could still play a role in Labor processes.

Government Services Minister Bill Shorten said the culture in parts of the CFMEU was unhealthy.

"The clear evidence emerging now is that there's a level of penetration in some parts of the construction sector by organised crime which is so far beyond acceptable," he told ABC radio.

"This is certainly an incredibly serious issue, and it's a betrayal of taxpayers. It's a betrayal of the vast bulk of people who belong to unions."

Opposition foreign affairs spokesman Simon Birmingham said swift action was needed from the government to address the allegations.

"The Albanese government chose to get rid of the (union) watchdog, they chose to ease up in terms of scrutiny of the CFMEU and Australians are now paying a price in higher road costs and construction costs," he told Sky News.

Australian Associated Press