The Business Council says the CFMEU administrator, if appointed by the court, does not have the power to properly investigate allegations of systemic corruption and unlawful activity and provide recommendations to fix the problems.
Business Council chief executive Bran Black said the Government needs to hold a judicial inquiry or Royal Commission given the serious nature of the allegations raised and lack of powers available to an administrator.
"Appointing an administrator is a step in the right direction but it is wholly inadequate if the objective is to uncover and fix the allegations of systemic corruption and unlawful activity by the CFMEU," Mr Black said.
"An administrator cannot compel non-union witnesses to give evidence or documents, investigate third parties, hold public hearings or recommend new laws.
"Violent bikies and criminals associated with the CFMEU could simply thumb their nose at the administrator and taxpayers, and the public will be none the wiser."
Mr Black said an administrator could not offer the protections needed for witnesses giving evidence and that was concerning given the CFMEU's past actions.
"The administrator cannot offer meaningful protection for whistleblowers, which is worrying given the nasty standover tactics employed by the CFMEU on worksites across Australia."
Mr Black said the administrator's powers would be confined to those approved by the Court, with the purpose to get certain union branches to a place where they can "function effectively."
"The Government is sending in an administrator to investigate the CFMEU with hands tied, and the only way to fix this is to hold a Royal Commission.
"Only a Royal Commission can find out just how far the rot goes, by holding public hearings and compelling bikies and criminals to give evidence."
