00:00Running a construction business is a precarious game, with more building companies going under
00:08than any other sector. In this financial year, more than 1,800 businesses have collapsed,
00:14an average of five a day. Construction costs have increased by 40% over the last five years.
00:21That's largely due to the closed borders and post-COVID supply chain shock that sent labour
00:26and material costs in an already overheated sector soaring. Construction inflation hit
00:32a peak in July 2022, with costs leaping 21.7%. Fresh government figures show that slowed
00:41dramatically, prices now rising by 2.8% in the year to November. Evidence, the Treasurer
00:47says, that efforts to bring down inflation are working.
00:51Australia's made substantial and sustained progress in the fight against inflation and
00:56we expect to see that reflected in the inflation numbers this week.
01:02The ABS will release the fourth quarter figures tomorrow, the last piece of economic data
01:07the Reserve Bank needs to decide whether to cut or keep interest rates on hold next month.
01:13Jim Chalmers reminding the RBA that inflation's back within its own target range.
01:18When we came to office, inflation was north of 6% and rising fast. Now it has a 2 in front of it.
01:24I want to see interest rates come down as quickly as possible, but the Reserve Bank
01:27Governor has sent out multiple messages to the government that when the government's
01:31spending continues to increase, that puts upward pressure on inflation and therefore
01:35interest rates stay higher for longer.
01:37The Master Builders Association is also sounding the alarm. While construction inflation has
01:42come down, costs and interest rates remain high and together it's putting a dent in demand.
01:49Master Builders is very concerned that we won't see a change in February. We're still
01:53seeing stubbornly increasing costs, inflation still high.
01:59Tomorrow's inflation figures are make or break as to whether there'll be an interest rate
02:03cut when the Reserve Bank Board meets in three weeks' time. For the Prime Minister struggling
02:08in the polls, a rate cut could offer a circuit breaker beyond anything else directly within
02:14the government's control.
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