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(generated from captions) you give credits for exports, and that is - from an economics point of view - a sensible way of running tax policy. The key killer is in the transition from the income-based system to the value-added system to. Give you an idea of what would be required to do that, take someone like Walmart, they import a lot of cheap goods from overseas, mostly China, they then sell them and export them. Under - and sell them to the US consumers. Under the revised tax system that business model wouldn't work. You would close pretty much Walmart, any of the major corporations who are moving funds offshore, because under oh value added tax it is advantageous to produce in the US. Business models would change dramatically. Which is a good idea, because the current business model in the US doesn't work well from a tax point of view. But the transition would destroy Republican senators in about seven or eight key locations. It won't get through congreet # -- Congress. The border tax adjustment idea is left what, is left is a tax cat, 15% tax cut. What that does is generate a very large budget deficit. Now, again, the Administration argues that economic growth will rise to 4%, this will be self-financing. Same arguments as an dear the Reagan tax cuts, same under the Bush 1 and 2 tax cuts. It doesn't work that way. As much as you would like to have a revenue neutral tax cut where the revenue itself is generated through economic growth, it is unlikely. What does that mean? If you put the spending changes and the tax changes, if it got through Congress, you would have to have a big increase in US Government debt, which may or may not get through Congress, but you also probably increase the US budget deficit by about 5% of GDP. That's a big deal. That has to be paid for and in our modelling who pays for it? Well, the same mechanism that's been paying for US budget deficits since the early '80s. Foreign capital flows into the US, drives up the US dollar, foreigners buy the bonds that the US Government is selling, long-term interest rates start to rise, because there's a funding requirement, a funding shortfall, and you get a world of very strong currency, very - well, not very high, but high long-term real interest rates and you get the financing fourth -- forthcoming. It means if you are a manufacturer - exporter of manufactured goods - you become less competitive. If you have a lot of debt, either household, corporate or government, your doubt servicing costs become a constraint on economic activity. This really damages the US economy in particular manufacturing and in particular manufacturing in the Midwest, and in particular workers in the manufacturing sectors in the Midwest. Here's a case where a policy which sounds clever - let's cut taxes - can lead to the complete opposite impact on the constituents that the Trump Administration is trying to help. So that's... It doesn't destroy the world, but it does change global interest rates, it does strengthen the US dollar, and it does cause a very large deterioration in the US trade balance. By our estimates, up to two-thirds of the US trade - of the financing will come through the foreign capital flows, therefore, that's 2 or 3% of GDP worsening in the US trade balance. So, that - let's park that for the moment. Let's move on to trade policy, which Jane's already talked about. On the trade policy, when you do the analysis - we have done that - what if the Trump Administration levies a tariff and everyone retaliates. It causes a global recession. Most well trained economists understand this. The Goldman Sachs group understand this. There won't be a trade war facilitated by action against China or anything else, except maybe against Canada for timber products, but there are few little tiny festering sores at the moment. But I don't think there will be a trade war this year or next year. What you do get, though, is the potential for a trade war three or four years down the track, because once the fiscal policies are in place and once the imbams in the external accounts get worse, somebody has to be blamed. You won't blame the Administration who is implementing the policies that are causing the problem, you will blame the foreigners and so I think although a trade war is unlikely in the near term, I think we're setting up set of macro policies which can push in the direction of a potential response, probably after the mid-term elections. Finally, let me touch on immigration, because people think the immigration issue is really a social issue, a moral issue. It is. But it's also a significant economic issue. When President Trump promised to deport all illegal aim ens that, is 5 -- aliens that is 5% of the us workforce. When you look at the sector composition, which we have done, that is 26% offing a cultural workers and that is 12% -- aug cultural workers and 12% of construction workers. If you take that adjustment, you have to scale it back, buzz although the argument was 5% - was all the illegal workers. Trump - the Trump Administration brought it back to roughly 1.5% of the US workforce as being potentially rounded up and deported. If you scale it all, that causes a significant slow down in the US economy. It is a significant supply shock. It pushes up the price of agriculture, slows down economic growth next year by about 0.8%. That, in itself, is actually a very poor long-term growth driver policy. If you add that, then, to the fiscal story, the fiscal stimulus will stimulate the US economy for a couple of years, just as it has in the past. We are expecting a big fiscal spend, a big tax cut. It will cause a significant expansion in the US economy. That is good for countries that trade with the US. If you are a country in the Asia-Pacific, Latin America, you get the demand for your products go up. If you have external or domestic private and public debt, and the yield curve starts to change so that the servicing costs rise, and the US dollar changes and your liabilities are in US dollars, assets in domestic currency, it puts pressure on economies that are highly exposed to that sort of negative shock. On balance, some countries will do well in the Asia-Pacific. On balance, particularly southern Europe, will be put under enormous pressure. Again, another wave of shocks for the eurozone, which is not the purpose of today. So let me just finish up by summarising that if you want to look for an - episode offence history that looks like what we might get, if, in fact, this gets through Congress, it looks very much like the early 1980s, where we had tight monetary policy to get rid of inflation, we've a tightening policy coming out of the US Fed, as we come through the economic recovery, and a big fiscal expansion generated by war spending and tax cuts under the Reagan Administration which led to large trade imbalances and a very big dislocation in the global economy. I think the bottom line is that in the medium to long-term, this sets up a dangerous set of imbalances in the world economy. Which will impact on the Asia-Pacific region. The question is - how do the countries in the region respond? We can talk about that in Q&A. Thank you. (APPLAUSE) We will go straight to questions and begin with the Western Australia. REPORTER: Thank you all, the three of you, spore your speeches today. We have had it confirmed today that the Prime Minister will be meeting the President for their first face-to-face meeting next week. In keeping with the theme, what should Malcolm do when he's meeting The Donald? What sort of things do you expect the Prime Minister to be asking of the President, what sort of things should the Prime Minister be offering the President, and what's the sort of markers for a successful meeting?We will move our way down the table.I think he will do what any Prime Minister of Australia meeting a new US President has done, and that is to concretise in the President's mind the value of Australia as an ally, and as interlock tear about regional affairs. I think the general truth about the alliance, the Australian American alliance, is that most Americans feel warmly towards Australia, but don't really think about Australia very much, and don't really appreciate the strategic underpinnings of what our alliance is based on. I think the overwhelmingly item of business will be to educate President Trump about exactly what Australia offers to the United States, in terms of being a point of view that deeply understands the region and has deep connections into the region, that can be very much put in service of the alliance.I might add briefly that - not sure what he will say but what you would like him to suggest to Donald Trump is that he thinks a little bit more about his geoeconomic tweeting and, perhaps, even try to understand what geoeconomics is before proceeding any further on the China/North Korea front.More complicated than anyone imagined! (LAUGHTER) The key issue is to push the argument that trade really does benefit the world an open trading system is important. We have seen both an undermining of the conceptual framework as well as an attack on institutions of international trade. That is drous. You can have rhetoric about unfair practice, by other countries, but to try and dismantle the set of rule - the rule-based system that the world has put in place and benefitted Australia dramatically, that positive story has to be pushed hard. Not just for Australia, but it is also in America's self-interest. The Australian? REPORTER: Given all geoeconomic tweeting that's going on, Australian Universities, in particular, highly reliant on international education, particularly from China. I'm wondering what the rhetoric will mean especially if there is kind of a war of words between the US, China and Australia about who is the dominant power?Jane?I actually think it's probably one of the most important sectors that we all need to be thinking very seriously about. It is quite possible that Xi Jinping can tighten his belt in that regard and that would be simply done by refusing student visas. So, it's a very quick tool. The Chinese students wouldn't be happy with that, but I think he would be prepared to make that sacrifice if he wanted to send a message our way. Just in the Financial Times this morning there is an article about a crack down or a - actually the headline is a purge, but it is the financial Times a purge on China universities and their connection with Western universities. It is important to read and reflect on that. It isn't obvious how Australia should respond to that at the national level, but I think at the university level, we need to be thinking clearly about a strategy to deal with that potential and to finetune the diplomacy to make sure it doesn't happen.I think this is a good news story for Australia. That is that personally, I am getting contacted by potential PhD students from the Middle East, from all over the world, who want to come to study at an NU rather than -- ANU rather than the US because of the uncertainty. If you look at the job market, I was involved in recruiting. There is a lot of economists who are already senior Professors in US universities from Turkey and other places, who are looking for a new home. Human capital effects of this type of policy of closing borders actually, in the long run, has a negative impact on the growth rate of the the US - doctors, nurses, researchers. And positive impacts on the country who receive the human capital, who have already been educated. It hurts the world as a whole, but the distributional effects are positive, if we handle...If you have a 457 visa on which they can come?Which allows 45-year-olds and over to stay.We could get some of our policy timing changes a little better. (LAUGHTER) I think there is a big question in all of this for the university sector to respond to, and that is how do we respond to the anti-elitist post truth politics that Trump represents? There is a sense in which we represent a sector that is elite and elitist, and we need to be aware that a possible backlash in coming, maybe not in this country, but certainly other countries, possibly in Europe, possibly in the United States itself. We need to be on the front foot in demonstrating our value more broadly to society, I think, in why a strong and vibrant university sector matters.On that point, though, when you look at the elites and the reaction you have seen in the United States - and we have seen in the the UK and to a certain extent here - aren't some people rightly angry about the changes to the economy that happen which they were told were going to benefit everyone, which clearly had a group of winners, which we never talked about? Back in the 80s we talked about the winners, but never the losers T people who lost lost for all time. They weren't retrained at new job. Some went on to disability benefits.Again, there was a group of people, the fact you have to have safety nets. The extreme right didn't believe in that, but I think most economists would argue that you did need that. Australia, in the debates, Australia is seen as a good role model because we do have a redistribution of income, which does help those who are hurt. Not just by trade but the unemployment we are seeing and will see will be through technological innovation, robots taking over white colour jobs. This is an issue to grapple with now. We have only seen the beginning of the process. There is a massive adjustment coming. Even if you do stop a lot of the trade across-countries, the technological innovations are there and happening now.On this point, that sets up a social problem. We already have the seeds of it now. If you see ever-more people who are disconnected from the workforce that, creates enormous political problems?I think that's right. The fact is that education in general is one of the best mechanisms for dealing with rising inquality within societies. Which has been rising across the world and the fact is that in places around the world they are underinvesting in education and, therefore, you get an angry left out class that stoorts the vote for Donald Trump.You say they are underinvesting, but I think we should fall into that category as well, if you have a flexible, adaptable workforce and people coming through the system who have - can adjust and enter new markets, when other markets close down, because we just don't have the comparative advantage. We have to have the money going into education pretty much.Simon Birmingham is here next Thursday. We can ask them some of those questions. Australian Associated Press. REPORTER: Thank you so much for your speeches. I have a double-barrelled question. How should Australia respond to the Trump world order in terms of geoeconomics and our diplomat strategy, and what do you think Turnbull should do in terms of getting closer to Trump and closer to the Trump Administration? Is that a positive or a negative for Australia and for the Australian Government?Who would like to begin? Look, the question of how to respond to geoeconomics is a crucial one for Australia. We remain a country that, I think, dedicated to free trade principles, and liberal principles. We are increasingly one of the only countries in the collective West that is currently doing that. I think Australia has been very effective in the past in this, particularly in this part of the world in going out and making the case very actively to other countries in the region that free trade, free investment is ultimately in their own interests, and making the sorts of arguments that Jane and Warwick have made, that geoeconomics may make sense in the short-term, but it certainly doesn't in the long-term, is a very clear argument to make. Quickly, in dealing with the Trump Administration there is a very big question that confronts us, and that is whether Trump is a flash in the pan, or whether he's a sign of a longer run trend of things to come in the United States. If he's a flash in the pan, if he's only around for four years, my counsel would be keep your head down and just rely on those underlying structures of the alliance to take us through. If he's a longer-term trend, then we've got some much more profound questions to ask ourselves about how close we want to be to the United States in the long-term future.While we're working that out, I think how could we go with anything but cautious at this stage. Particularly as the point I have lure made, I don't think Trump know what's geoeconomics is but he is using it. The Chinese leadership has a greater awareness of it. They are yet to understand the impact that some of those decisions can make. The BRI, I don't think, it's - they have necessarily decided - designed it to have geopolitical impact, but it will because of the size of China. This geoeconomic stuff is the really an again being played out -- a game being played out by the two great superpowers T other thing Australia could do with reflecting on is how small we are and to have a little bit of humility in questioning our capacity to effect that big game. But getting out there and running the line that we know best and that has served us so well, it is where economists from the left and right almost universally unite - and that is on free trade and openness to an international trading system that had taken and brought Australia to where it is today. It's no time to be talking Australian jobs for Australians and shutting down our doors.The key lesson here is not to think you can predict anything very much in the future, and that the idea that you can make your way in the world by cosying up to any particular political power is very, very high risk. So, from a policy point of view, Australia should be moving into a position where whatever shocks come our way, whatever the Trump Administration does, if my scenario plays out, we are in a very vulnerable position because we have high amounts of household debt, we have large amounts of Government debt, we have a budget deficit, which is only sustained by a booming world commodity market, which pulled a rabbit out of the hat in the past 24 hours with the IPF forecast being revised. We have to be more robust. As we were in the financial crisis in 2008/9 we have the capacity to move interest rates, we have the capacity to use fiscal and other policies. We have drifted far away from a risk minimisation strategy and we continue to have political debates which you wouldn't know that - the risks are out in the world, if you look at the policy debates we're having in our Parliament. That has to changes because it doesn't take much for the world to shift and we have to be in the right place when it does.Sounds like one of the those things you put in a model, "Assume astute political leadership and knoll low from there." (LAUGHTER) REPORTER: Tim Shaw. It is Melania's's birthday and we asked our listeners to reflect on what would be the perfect gift. One of the listeners said North Korea and they could build Trump Towers. Malcolm Turnbull will be in New York next week, his association with Goldman Sachs. With the two deal makers, is it contingent on Prime Minister Malcolm Turnbull to explain what's happened in the last 50 years in Singapore, China and in Indonesia and explain to President Trump about Australia's pivotal role in growing not only our trade in the Asia-Pacific region, but in some parts telling America to back off and leave it to Australia?Well. (LAUGHS) There are enough people in the White House who understand the issues that you raise. Yes. Yeah. As soon as - the new chair of the Council of Economic Advisers has just been appointed. He is a well trained tax economist. There are good people being brought in to the White House. The reality is at some point you have to act in the national self-interest and I'm still optimistic that, subject to all sorts of weird things can go wrong, that there are enough sensible heads at work inside the White House. The critical point that Michael raised, which I think is deeper, is that there a lot of positions - over 2,000 - which haven't been filled that perform critical roles, both in the debate and the policy formulation in the US, but also in the international agendas. That, to me, is something that I think we should be pushing, get the positions filled, become off the idea that if you ever said anything bad about the president you can't fill one of those positions. There won't be too many well trained people you can employ under those circumstances. OK. Moving on to the Canberra Times. REPORTER:. You have done a terrific job of demolishing the Trump presidency, geopolitical yay and economically? What went wrong? Why did the war on facts that Michael was referring to earlier on, why did Trump win the war against fact? How did the yufsht sector so completely in America abandon the ability to influence this? And is there a problem were the old economic models? I mean, you have suggested that it won't work. Maybe people who are on the outside just don't carefully more?We might start with the first question to the first two. Look, Nick, if I could answer that question, I think I would be making a lot more money than I am at the moment! Look, I think the people who voted for Trump are those that probably felt they sick of being talked at. I think there's a sign that there is a broader trend going on. I notice the most recent edition of foreign Affairs has a story around, you know, the end of expert opinion. That really it wasn't Trump it was President Obama who stopped talking and listening to the think tanks and was proud to be doing so. I think there is a sense in which expert opinion is unaccountable, has started to be a dime a dozen, and there have been well funded disinformation campaigns that you can have 97% of the world's scientists saying that climate change is a thing, but you can also have at few very well funded scientists saying that change is not a thing. And getting as much publicity as the others are. I think this is the general kind of Zeitgeist we are living in at the moment. I'm not sure that the universities in general have much of a sense of what to do about it and how to respond.Jane?Probably not a good time to point if I Kate -- pontificat. Scrum -- Trump won the election. I wouldn't go so far as to say the truth with the media, or any other number of things. I think that all remains to be seen, particularly on the free trade front. He hasn't got a leg to stand on and he won't win that one. To signify that, I would like to be giving Melania Trump my pussy hat, which I have worn with pride to debate exactly why it is that the media is taking more interest than ever before in the truth and I hope they will continue to pursue it. And beat him. (LAUGHTER) I don't think the old economic model is dead. We have had the biggest reduction in poverty in world history, because countries like China and others have moved towards a market-based system. The critical issue isn't that the model is dead. The problem is that the issue of redistribution has to be front and centre. Again, Australia had done a reasonably good - not a great - but a reasonably good job relative to many other countries. I think going forward this will be mixing the drivers of economic growth with the issues of environmental sustainability and redistribution. And there is a lot of people thinking in this space, in act deem may and in various -- act deem may -- acdemia and other departments around the world. We didn't give enough weight to distribution issues.SBS.Jane, you mentioned Donald Trump's recent tweet where he withdrew from calling China a currency manipulate tore - at least for now, but he did seem to qualify that by making it contingent own excite that exercise its leverage on North Korea. If you compare Trump Administration with previous administrations. It is unusual to trade foreign trade issues so directly with Joe owe politics? Is it risky? If China fails, is he likely to backflip again on that? Call China a currency man nip lay tore, and what would be the effect of that on world trade?Great question. I think it is dangerous. Although I have no idea how that Mr Play out. I called a dangerous and stupid geoeconomic tweet. Not to again get the knife into Trump too harshly. The stupidity is China has never been a currency manipulate tors. The IMF has never made that call. They have had a fixed exchange rate and they have moved that to a managed float and they have at times accumulated vast sums of foreign reserves to keep the value of the it low. In the last two weeks - Warwick will correct me if I'm wrong - in the last two years China spent close to a trillion dollars of its foreign exchange reserves in trying to keep the value of it up. Doing exactly the opposite of what Trump is trying to accuse them of doing, and so how could he possibly punish them with that when they didn't to what he wanted when they weren't doing it in the first place. Stupid and dangerous. (LAUGHTER) Fair enough.With all due respect. I am glad you qualified that. The Guardian. Thank you for that fall qation. My question is similar. Just with a different inflection. To you, Warwick, because I don't have been the strongest, I think - although both have been strong on the idea that Trump will prove all talk and no action on trade and protectionism. However, I was interested to see Kim Beazley, who is a former Australian ambassador, wrote a piece recently, where he suggested the opposite. In fact, that he was likely to go full... He wouldn't go down your path, which is blame foreigners in two years' time, but go full tilt. So, I guess my question is what gives you your optimum that you're correct and Kim Beazley is wrong in terms of his read of the play, and tying back into the North Korean question, because it does sort of fuse the panels' expertise nicely, to what extent do you think that Trump may now have to reassess his protectionism because he needs China diplomatically on the North Korean question? Do you think that's an active trade-off in his mind? Or just something that's happened to him that may recall xwrat -- recalibrate the debate?I mean, Kim Beazley could be right. Anything can happen. Again, there's been a little bit of a trade war between Canada and the US, and there are small issues that could easily get out of control. My view is that people with economic interests in the global economy know that a trade war is a bad idea. Self-interest, naked self-interest, even of the president, he does not want the world economy to go into a recession because he has assets all over the word. Therefore, naked self-interest should at least make you pause. Now, I don't think that's sustainable if all the policies they are advocating are implemented, within a couple of years the US trade position will be a lot worse than it is today. And that will lead to some increased agendas for raising tariffs. That is the most sensitive point. It isn't now, but it's is momentum, it will be there. But these policies, who knows, might happen in the world economy over the next 3 years. There is a recovery going on T world could be different by the time we get three years from now. Hard to predict.I think the appointment of of peetzer Nevara -- Peter Nevara is a concern. It is about prevery sing American jobs. Without knowing the details, I'm not optimistic it won't be - there won't be protectionist elements. I will defer to Michael on the sort of security implications for North Korea, but on protectionism, you have got him not now going to a trade war with China but he is calling on China to use sanctions. That is another form of protectionism. Again, that's not necessarily a sign that it's going to be a happy special trading order, that is used to achieve geopolitical ends.My view is that everyone is being way too optimistic as to what China can achieve against North Korea. There seems to be a belief if we pressure the Chinese hard enough they will act hard enough and they will stop North Korea doing what it can. We need to remember that North Korea developed most of its nuclear technology and capability while most of its people were starving. This is not something that is a rational calculation for the North Koreans, this is something that is existential for them. So, I think Trump's increasing pressure on the Chinese is a sign of desperation, a sign that the United States doesn't have any other good ways out to try and pressure the North Koreans at this stage. It is a sign, to my mind, that they are acknowledging that a military strike will not destroy the North Korean nuclear program and it will probably rain down destruction on America's two closest allies in north-east Asia. The big question that Trump - are you going to be the president that allows the North Koreans to develop the technology to deliver a nuclear weapon direct to the US mainland during your presidency? That's the big question in front of Trump, and pressuring the Chinese is a way of kicking the can down the road, for the moment. The big question is going to be once the Chinese gambit doesn't work and suddenly the North Korean missile tests start to get worryingly good, exactly what then options are on the table.The ABC? REPORTER: Thank you for your contributions today. Sabra Lane. A question for Warwick and Michael - how should Australia prepare for a trade war? It is possible, you have said. How would she be preparing for that now? -- how would she be preparing for that now? To Jane. Given the Prime Minister and our Foreign Minister have backed in America strongly on this point, and also reinforced that message that China should be using influence to help contain North Korea, how would they be regarding Australia's input in that regard?And?The simple answer is they wouldn't be regarding it well at all. I think it would - we would do well to may more attention to how the Chinese media reports on actions like this by the Australian Government when it happens and from what I heard just this week, you know, it's reports of us kowtowing and doing what the Americans want. That isn't going to go down well if will China and something for us to reflect on.It does depend on the nature of the trade war. If all countries put up tariffs, the Australian dollar will drop substantially. We will need to use some form of money think and fiscal -- monetary and fiscal policy. Similar to the Asian financial crisis in '97/98. We have the flexibility in the economic - although some - labour market flexibility has been unravelled under the Labor government. We do have the flexibility that you need. You do need to have your other policies in a position where you can respond if needed. If the trade war broke out tomorrow, we wouldn't be in a good position. Two years from now, and we have the fiscal house in order, we have interest rates more normalised, back to levels that are appropriate, we would be in a better position to respond.Please thank our guests. (APPLAUSE)

This program is live captioned by Ericsson Access Services. Malcolm Turnbull and Donald Trump will meet for the first time in New York next week to commemorate the Battle of the Coral Sea, following a terse phone call earlier this year over Australia's refugee deal with the US. The South Australian leader of family first has shrugged off suggestions that his party's decision to join with the Australian conservatives was spurred by the loss of Bob Day. It will be disbanded and the two remaining members will join Cory Bernardi's new party. The former Northern Territory corrections boss is appearing as a key witness before the Royal Commission into youth detention in Darwin today. Kate Middlebrook authorised the tear gassing of 60 DT knees in the Don Dale detention centre. The incident sparked the Royal Commission after footage aired -- after footage aired on Four Corners. And the board of the AOC will need to address bullying allegations. John Coates is fiercely denied a culture of bullying and says he is the victim of an increasingly desperate and Obama to campaign for those who want to see him replaced by a challenger. And in some breaking news, the AOC has announced that media director Mike Tancred is standing down from his position pending the outcome of any investigation of complaints made against him by the former CEO, Fiona de Jong.

de Jong. Deputy by Minister Barnaby Joyce says it is important for the leaders to meet in person.There is something of chemistry when two people meet face-to-face which is probably not over a phone call but the Americans and the Australians know how important this relationship is. It's not a case of being a deputy sheriff, it's a case of two people with similar values, a belief in the rule of law and the rights of the individual, a belief in the principles that people should be left alone. A belief in trial by jury. Experience over such a long period of time that these rights are to be protected at times, that requires the Defence Force putting their lives on the line. As they have done in the past and they will do in the future. Underpinning that relationship must be the close working relationship between the elected heads of both nations, so the Prime Minister of Australia and the President of the United States, they have it in the arena it both for this relationship and its facilitated in the highest form by one-on-one meetings.The Australian Conservative Party headed by Cory Bernardi is -- Cory Bernardi is merging with family first. Cory Bernardi says the aim of the party is to support families, free enterprise and smaller government. Family First is a party with a strong successful electoral record built on upholding those principles. The joining of our respective political forces is natural and it will strengthen the conservative movement right across the country. Dennis and rob are among the very best and most capable politicians here in South Australia. I have known them for many, many years. Our shared aspirations Frau stated our nation and our shared values have forged a very strong bond. This is an important step in uniting the Australian conservative movement. Together, our movement will be stronger than if we go it alone. Our party is governed by principles, not personalities and that is why it wasn't named after an individual but it was named after a group of people, Australian conservatives. We know there is a better way for our state and for our nation.Cory Bernardi's former colleague Christopher Pyne was asked about the merger. He says he does not think the move will hurt the Liberal Party in South Australia.I don't think it will eat into the Liberal Party vote in South Australia. Family First recorded their lowest vote federally ever in the last election at 2.9% and there was a poll recently about crossbenchers and how people either approve or disapprove, Cory Bernardi was at -35% approval so I do not think the party will eat into our vote at all especially when people recognise that if you want good government, you have to vote for the Liberal Party, especially in South Australia. Voting for minor parties threatens Labor staying in office or worse than that, chaos at a time when we want jobs and investment in South Australia. We don't need more chaos brought about by minor parties with large egos.

with large egos.The cook the Queen auditor general has found that pressure from police hierarchy to cut crime rates is that Queensland Police open to claims of manipulation. Mark Willacy joins us, tell us what has been happening. In January, the ABC ran a story saying crime managers, particularly on the Gold Coast, were being pressured to put a lid on the crime rate, manipulating police crime reports. The auditor general was investigating this issue and has released the report into that and what he has found is that basically, crime rates or crime statistics in this state are unreliable at best and basically, he thinks they should be treated with caution and one of the most disturbing things is that he is saying police are actively soliciting victims of crime to try to get them to withdraw their complaints. These are fairly serious allegations about the crime statistics in Queensland. It seems they are not to be trusted. Have State police responded yet?Not as yet. We are expecting Ian Stewart, the police commissioner, to comment today but he has said in the past that he would co-operate and the Queensland Police would co-operate with the auditor general's report. We heard from Police Minister Mark Ryan who said he was concerned. He will speak later today on this. It would seem what we have got here is the police hierarchy potentially putting perceived pressure on officers to keep the crime rate low. And in response, those crime reports are being manipulated.These allegations that police are similar to sing the things -- victims of crime to withdraw complaints, what does that mean?Now contacting the victims of crime and saying, do you want to go on with this complaint? They are using other methods in -- other methods whereby they send off a letter giving the victim seven days and if they do not respond within that time, it is assumed that they no longer want to go ahead with that complaint and also they are giving them three strikes or you are out, they will try to contact the victim of crime three times about the complaint and if they do not hear back, the crime will not be counted. These are serious allegations that the Queensland Police service has to address although we have heard it has moved to deal with these issues but we do not know in what form.Meanwhile, we do not know what crime rates are like in Queensland.We know that crime rates on the Gold Coast, and that was the focus of the report, have been climbing in many aspects, in many fences. What this will raise huge questions over is if crime mates are already rising, what impact has this fudging of the figures for this alleged fudging had? Would it suggest that the crime rates are even worse than what the official figures suggest?Bill Shorten has been speaking to the media in Sydney with some of his Labor colleagues.I am pleased to announce that Labor, if elected, will start building a western Sydney rail line. I'm pleased to announce it Labor is elected, we will start in the first stage of building a rail link between Leppington and Bringelly to western Sydney airport and we would start the work to build a railway line from Macarthur in the south to St Mary 's in the north. We are doing this because this policy will deliver more jobs and better public transport unless congestion. Today, Labor is making it crystal clear that if we are elected at the next election, we will start building the Western Sydney rail line. We are putting our cards on the table and calling upon the Liberal Party to do the same thing. So far, the Liberals have not committed to a timetable to build western Sydney rail but have given dodgy answers and brushed off the issue. Malcolm Turnbull has a chance in the budget coming up in two weeks to outline his plan and a timetable for western Sydney rail. If Mr Turnbull and Mr Morrison refused to outline their commitment to western Sydney rail, we know it will be a very different -- A long time before this railway gets built under the Liberals. This is our commitment. No games, no smoke and mirrors, this is what we want to do and we call upon him to be crystal clear to the people of Western Sydney where he stands. I would like to ask Anthony to talk further about the detail. Thank you, Bill, and it's fantastic to be here with Mike and Stanley here in south-west Sydney for this exciting announcement. The fact is, Sydney's passport network at the moment, the rail lines go from western Sydney into the CBD, from south-western Sydney into the CBD, they are building a line from north-western Sydney into the CBD but there is nothing to connect western Sydney a long of the north-south corridor. Deloittes has done a study which shows the economic benefit for western Sydney of a north- south rail corridor that we are proposing today is some $44 billion between 2024 and 2040. That is why this has to be seen as an investment in jobs and the future of Western Sydney. Batteries Creek airport needs to be much more than just a terminal or runway. -- Badgerys Creek. It needs to be a catalyst to a job. The science Park north of Badgerys Creek airport will attract billions of dollars in investment, 12,000 jobs, 4500 dwellings. Australia's first K -- 12 science and technology, engineering and mathematics school run by an MoUs which has been signed between the developers and the Catholic education office. What we want is kids in the MacArthur region and kids in western Sydney to have an opportunity to get to that school. We want people to have an opportunity to get to those jobs which will be created as a result of the stimulus provided by the airport. That is why we are proposing a commonsense solution, one that is supported by all of the local councils in this region. It's one that is necessary for the future of Western Sydney, to extend this rail line from Leppington up to the airport through Bringelly and have the airport rail link, another developed want, from Macarthur, through the airport, to connect with the Western line at St Marys and a further stage down the future to connect with the Northwest line at Rouse Hill. This is an important project and the government has acknowledged that rail will be necessary but they say it will will be built to the airport with a cavity for a railway station sometime in the future. The people of Western Sydney deserve first-class infrastructure which means an airport with a rail link from day one to service the community but to also serve as those other advanced manufacturing and education and logistics and tourism jobs, those other jobs created as a result of the stimulus of the airport.What would you say is the biggest problem with the Central government, no money?It is smoke and mirrors. They keep talking but in the end of the day, they must show the people of Western Sydney the money. Unless there is a timetable and budgetary commitment, it is just hot air. We call upon the Turnbull government, you've got a chance in this budget to put your cards on the table. Labor is making it crystal clear that if we are elected, we will start building the Western Sydney railway. We are backing up our promises with a timetable and a budgeted commitment. If Mr Turnbull continues to give dodgy answers, we will look at it, we will have another study, people should be aware that they will be very old before public transport gets renewed and the Western Sydney railway gets built. Anthony has been pushing this issue and will talk a bit further about what am -- what the government has not done.They are saying they acknowledge the airport will need a rail link. They are saying they will build into it two potential stations as part of the construction of the airport, as part of the design they are not putting a timetable on it. They are not saying that rail will be available from day one when the airport opens and what we have seen with other infrastructure issues including other Australian airports is but if you go back and retrofit down the track, it ends up costing you more to do that. It makes sense to have infrastructure development in advance of other activity, not following on. That is what good economic policy says and the study that has been commissioned from Deloitte's shows. $3.4 billion a year by 2040 is what will be contributed. That's an extraordinary positive analysis which has been provided. The consultation has happened already with the community. That's what these local members have done and State members have done and the local councils have done. I've had meetings recently with -- Penrith Council, Blacktown Council. Campbelltown. They are clear that the designs of stage one in stage six in terms of the options that are available are the way to go. That is why the government should get on with the business of providing a clear commitment that the railway will be open on day one. Getting on with the business of putting funding in the budget in two weeks' time. $400 billion, they have said it will not even by a train station. Would you consider value capture?It's one of the reasons why it makes sense. You might recall a press conference with Luke Foley prior to the State election. The airport hasn't yet been released. Whether Sydney airport takes up the lease or whether the government builds it itself and on cells, it makes sense to build in the investment of the railway into the least price of the airport. There is no doubt that the State Government will benefit from the uplift in value from the Western Sydney employment lands that are substantial to the north of the airport. That is why the State Government, it is getting a huge bonus from the western Sydney rail line that we are proposing. It's one of the reasons why it stacks up and makes sense. The science Park, the tourism facility there for a high-end tourism motel hotel development which is already going through the development process at the moment of approvals. This investment is happening right now. It's dependent upon a railway line and they are factoring in at some time being built. They are assuming it will be built. Sooner rather than later. We are saying upfront, that is money that is available. The State Government should make a contribution. Of course, it's up to the State, the government actually runs the rail and road network but the private sector have said, they are prepared to make a contribution as well and of course, they should. Will the Commonwealth thrown money? Labor has been open to that for funding the airport but also public infrastructure but let's be really clear, the government use, should be factoring in engineering the public transport and rail links to the airport now. I live in Melbourne where we don't have a rail line to Tullamarine Airport, we don't have proper passport to Tullamarine Airport and the cost of retrofitting public transport once the airport is functioning is horrendous. The other thing is, of course this project will be more than $400 million. But I think Australians are a bit sick and tired of announcement with the detail. That's why Mr Turnbull has an opportunity in the upcoming budget to spell out some commitment to building the rail line. What we don't want is another airport without public transport links. You can't take Turnbull on rice and seriously it than a budget in the early stages. -- Morrison.You made an announcement in the last election for money on a north-south link. Is this just rehashing?This is demonstrating our ongoing commitment to western Sydney. We have a budget in less than two weeks. If Turnbull and Morrison are serious, they need to have provision in the upcoming budget. I have visited western Sydney 10 times since the last Federal election. I do you think he has been far west at all since the last election. This is an opportunity for Mr Turnbull and Mr Morrison to demonstrate they are equally committed to western Sydney. We are putting some markers in the ground well in advance of an election for our commitment. Minister Constance, the passport Minister, said Bill short on ideas and build short on cash.Does that worry you? Doesn't worry me if the Liberals is mean things about me? No. Congestion in western Sydney worries me. What Morrie -- Morice -- what worries me is public transport links for an airport. They have no practical plans to jobs, for small business, public transport in western Sydney. That is what matters.If they are playing the man rather than the idea, it is pretty good.There is a meeting with Donald Trump next week. How important is that to get it right is to mark? -- to get it right?It's important that the meeting goes ahead and I hope the nation's sake, that meeting goes well. Australian prime ministers have met with American presidents before this. It is unfortunate that the time Malcolm has got is the week before the budget. I would say it's unfortunate in terms of domestic matters because the most important domestic issue happening is the government focusing on the budget. This budget -- this government needs to let Australians know where the country is headed and so far, we have not seen a lot of clear focus from the government about the budget. What happens is, every day lately, this government has a different maybe for a problem in Australia. Take housing affordability. Someone comes up with a thought bubble. Someone else in the government comments about the thought bubble. Somebody else rushes out to rule out the port bubble. Housing affordability is a major issue for Australians. I think it is important that before Malcolm gets on the plane to visit President Trump, he spells out the direction of this budget. It's not really good enough to say we will wait until budget night. The corporate tax cuts, Malcolm Turnbull has let Australians know what he intends to do. Pensioners, working families, they have heard the speculation they are up for a severe hit in the budget. Malcolm Turnbull owes it to the Australian people that this is the government focused on the budget and where we are going.Stay with us. I will be back with the top stories after the break.

This program is not captioned. This program is live captioned by Ericsson Access Services. Australian Olympic Committee in crisis mode - media director Mike Tancred stands down amid allegations of bullying made by a former AOC chief executive.

Malcolm Turnbull and the US President lock in their first face-to-face meeting in New York next week. Cory Bernardi's Conservative Party to merge with Family First, but new senator Lucy Gichuhi chooses to go it alone. And rising fuel and health costs are the big drivers behind a spike in the inflation rate.

Good afternoon. Ros Childs with ABC News. The media Director of the Australian Olympic Committee is standing down from his position, pending the outcome of any