The state Labor government on Monday responded to a report by parliament's Integrity and Oversight Committee, which recommended a major overhaul of the Independent Broad-based Anti-corruption Commission (IBAC).
It supported 21 of the committee's 29 recommendations for government in principle, including giving the independent integrity agency "follow the money" investigative powers.
The watchdog can investigate public officials or bodies, but not contractors or third parties such as union officials and bikies, under its legislative framework.
It has been calling for "follow the money", also known as "follow the dollar", powers since 2017.
"Let me be clear, I want the follow the money investigative powers to be retrospective," Premier Jacinta Allan said.
"IBAC should be able to examine recent allegations and also work alongside Victoria Police to ensure all criminal behaviour is investigated."
Barrister Geoffrey Watson SC's report into the CFMEU found worksites became drug distribution hubs, killers were handed high-paying jobs and strippers performed for night crews following organised crime's infiltration of the union's Victorian branch.
Redacted sections of the report, entitled Rotting from the Top, claimed Victorian government inaction caused an estimated $15 billion in blowouts on Big Build projects.
Ms Allan said she had maintained a zero-tolerance stance toward criminal behaviour in any workplace.
"Allegations of corruption and illegal activity on Big Build worksites has been shocking," she said.
"I am personally appalled by what has happened and, whilst these crimes were committed by a small number of individuals, the impact has been far-reaching with serious consequences for workers and their families."
The IBAC Act's current definition of "corrupt conduct" requires it to constitute a criminal offence.
Former IBAC commissioner Robert Redlich repeatedly complained the definition did not address what he called "grey corruption", declaring it provided a "safe haven for politicians and public officers".
Under the reforms, the current definition of corrupt conduct would be broadened to capture a wider range of behaviour.
Other changes would strengthen transparency and reporting, including empowering the watchdog to make and publish formal findings of corrupt conduct.
The Allan government has committed to introducing legislation by the end of 2027 after receiving advice from an expert reference group.
"These changes are the most far-reaching since IBAC was first established in 2012," Ms Allan said.
Opposition Leader Jess Wilson said Victorians deserved the truth before they went to the polls in November, not after the vote.
"Jacinta Allan wants the headline today and the investigation after the election," she said.
"If these powers are needed, they should start now."
Legislation to give the corruption watchdog "follow the money" powers passed the upper house in March, but Labor blocked debate in the lower house.
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