US, EU report progress in TTIP trade talks

US and EU trade representatives have had a "productive" fifth round of talks, but hard work lies ahead, US trade representative Michael Froman says.

"We've moved from discussing a conceptual framework to defining specific ideas for addressing the majority of the negotiating areas," Froman said as the talks ended.

He said there was "a lot of work ahead" but "steady progress" was being made and there was now "a firm understanding of the key issues that need to be resolved".

Froman's chief negotiator in the Transatlantic Trade and Investment Partnership (TTIP), Dan Mullaney, called the week's talks "challenging".

Completing the world's largest free trade agreement "will require a lot of creativity and a lot of persistence," he told reporters.

Ignacio Garcia-Bercero, chief negotiator for the European Union, underlined that the overall goal was "highly ambitious" but that progress had been made through "intensive" discussions this week on labour, environment and sustainable development issues.

The US and European Union aim to expand what is already the world's biggest trade relationship by dismantling regulatory barriers that force companies to produce different products for the US and European markets.

The next round of talks is slated for July, most likely in Europe.

The US and EU say the deal would allow companies to save millions of dollars and create hundreds of thousands of jobs.

The toughest areas of dispute are financial regulation, which the US does not want to include in the deal, and a special extrajudicial mechanism to settle investor-state disputes, which has met growing opposition from European civic groups and the German government.

Garcia-Bercero sought to reassure that the EU "in no way" intended to "weaken financial services regulations ... or interfere with work being done".

US financial officials have repeatedly pushed the EU to tighten its banking regulations, in light of the rolling bailouts that undermined economic growth across Europe in recent years.

Garcia-Bercero said there had been "very intensive discussions" over allowing businesses on both sides of the Atlantic to bid on public procurement offers, which are currently largely restricted to domestic bidders.

European businesses are keen on having access not only to US federal projects, but those of the individual states, which are not under federal control.

The United States likewise wants US firms to be able to bid on government contracts across the EU and is "looking for opportunities to expand market access," Mullaney said.

The prospect that Europe's strict food safety rules could be watered down through US standards has driven much of the public interest in the talks, especially during ongoing European Parliament elections.

Garcia-Bercero repeated past EU assurances that hormone treated beef "has to be prohibited under European law".

He said genetically modified crops could be a different issue, with more than 50 "GMOs" having been authorised in Europe.

The US wants Europe to accept World Trade Organisation obligations that allow trade in food that has been approved through scientific review and risk assessment, Mullaney said.

So-called bleached chicken sold in the US is another hot issue.

Mullaney said "there is no such thing as bleached chicken" and, when pressed by a reporter, indicated he saw no problem.

"I have very catholic tastes. I will eat almost anything," Mullaney quipped.

"The United States has no intention of forcing Europeans to eat anything a European does not want to eat."

Garcia-Bercero was optimistic about finding common ground in regulations of most sectors, saying there had been a "very good" discussion, though no point of agreement had been reached.

"We are progressively reaching a better common understanding on these issues," he said.

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Budget will pass eventually: PM

Tony Abbott says he won't compromise on his budget as pressure mounts from all sides. Source: AAP

PRIME Minister Tony Abbott says he won't surrender his budget in the face of pressure to compromise over its most unpopular measures.

Mr Abbott is confident the coalition's first budget will pass the Senate because the alternative would be a double dissolution election.

Senior government ministers have signalled compromising on key budget reforms such as higher education interest rates and the GP co-payment, amidst a fierce public backlash and a hostile Senate.

Continuing the budget sell on Saturday, Mr Abbott said his team "absolutely" understood the "iron necessity" of sticking with difficult and unpopular budget measures.

"We are not going to surrender our budget commitments," Mr Abbott told reporters in Adelaide.

But negotiations were inevitable.

"You have got to negotiate your legislation through the parliament," he said.

Mr Abbott was confident that the government would get the budget through the Senate in the end, because the alternative would be a double dissolution election.

"Because let's face it, there have been many governments over many years that have had to negotiate budgets through the Senate.

"The only time that wasn't successfully done ... that was a different bill in 1975."

Last week, Mr Abbott appeared to back away from a threat to hold a double dissolution election after earlier signalling incoming Senate cross-benchers would be unlikely to keep their seats if there was a new election.

Labor, the Greens and Palmer United Party have vowed to block changes such as the Medicare co-payment and pension cuts.

Education Minister Christopher Pyne, who has faced a slew of student protests this week over university deregulation measures, has signalled compromising on some reforms.

He said it was in recognition the government did not have a majority in the upper house.

"We will of course seek to consult and negotiate with the minor parties and the crossbenches to ensure these important reforms are delivered," Mr Pyne said in a statement to AAP.

The industry is also being consulted to "refine the details" of the changes, with two higher education stakeholder working groups providing feedback.

Opposition finance spokesman Tony Burke said the government's willingness to compromise showed it was in disarray and its budget unravelling.

If any measures change in the parliamentary process, Labor will apply the same "tests" to vote them down in the way it's opposing changes affecting pensioners, university students, Medicare, and fuel and cost-of-living prices.

"If they want to keep changing the budget because they're in disarray and chaos, we will keep applying the same principles," Mr Burke told reporters in Sydney.

Meanwhile, the Australian Medical Association is set to hold urgent talks with Health Minister Peter Dutton to seek a compromise on all medical co-payments flagged in the budget.

A vote was passed at the group's national conference on Saturday to push to have the payment targeted at higher-income earners.

The group is concerned co-payments will hit vulnerable groups hard and add pressure on hospitals.

"The health minister has made it clear he wants to engage with the profession about the future of the health system," president Steve Hambleton said in a statement.

"The AMA is well-positioned to help the government design a fairer and more equitable model."

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Qld Labor downplays by-election chances

LABOR'S candidate for the Brisbane seat vacated by maverick former government MP Chris Davis has vowed to be a thorn in Premier Campbell Newman's side if he's elected.

But maxillofacial surgeon Dr Anthony Lynham is playing down his chances of winning Stafford, an electorate devoid of representation after Dr Davis quit parliament on Friday.

His dramatic departure means the LNP is facing a by-election battle just three months after suffering a 17 per cent swing against it in the Redcliffe poll.

However, Dr Lynham says winning Stafford won't be a cakewalk.

"We are not taking anything for granted, we have to earn it," he told AAP while campaigning on Saturday.

As an anti-violence campaigner, Dr Lynham says he's already taken Mr Newman to task and will up the ante if he enters parliament.

"I have a proven track record of standing up to Newman," he said.

"The people of Stafford need someone desperately to stand up to Newman on health and education.

"I will be a thorn in his side."

Opposition Leader Annastacia Palaszczuk has already promised to give Dr Lynham a senior position if he's elected, but she's also downplayed her party's chances of regaining Stafford, which the LNP holds by a 7.1 per cent margin.

Ms Palaszczuk says Dr Davis' resignation was a vote of no confidence in Mr Newman's leadership and has called on the premier to immediately announce a by-election date.

Dr Davis said he was partly demoted because he raised concerns with the premier about looming changes to political donations.

He was sacked as assistant health minister a week earlier after clashing with colleagues over the proposed individual contracts and changes to the state's corruption watchdog.

At the time of his resignation, Dr Davis released polling showing most voters in his Stafford electorate backed him and believed he had been unfairly treated.

Treasurer Tim Nicholls said Dr Davis' exit was disappointing and came after colleagues had urged him to stay with the party and effect change within government.

Mr Nicholls said the government expected a tough fight at the by-election.

"The premier is getting advice about the timing of calling a by-election and I'm sure he'll make an announcement in the near future," he told reporters.

Brisbane Central MP Robert Cavallucci would represent the interests of Stafford in the interim, he said.

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Economists focus on RBA and wages

ECONOMISTS this week pondered plunging consumer confidence, slow wages growth and an immobile central bank.

The minutes of the RBA's latest board meeting were released on Tuesday.

Economists pored over the changed wording of the minutes for any hints of a shift in the RBA's stance but found nothing conclusive.

But JP Morgan economist Stephen Walters said the RBA's board members clearly still feel that interest rates "will not be going anywhere any time soon".

"Officials probably simply got bored with the previous verbiage, so have tried to express the same thing another way," he said.

Key to the RBA's stance is the sluggish labour market, with slow wages growth and an unemployment rate refusing to fall.

The ABS confirmed wages growth was weak, with 2.6 per cent annual growth the slowest in the 14-year history of the data series.

RBC Capital Markets economist Su-Lin Ong said that reflected the weakness of the labour market last year.

"While this may be the trough in wages growth amid a stabilising labour market, a sustained pickup is not on the cards over the next few quarters," she said.

Commonwealth Bank economist John Peters noted that wages growth was now below the official inflation rate of 2.9 per cent.

"In today's deregulated and decentralised wages system most workers have precious little real pricing power, and are essentially 'price takers' rather than 'price makers'," Mr Peters said.

Janu Chan, economist at St George Bank, said recent improvement in labour market indicators meant wages growth should not slow much more, but that a pickup would require a "substantial and sustained" fall in unemployment.

"We expect the RBA will leave rates on hold for most of this year before raising rates in November, although there is a chance it could hold off until early next year," she said.

But a rate cut might still be possible.

"The fiscal drag, alongside stubbornly high AUD, rising joblessness, and the sluggish transition away from the mining investment boom, are key elements of our view that the RBA's job here may not be complete," JP Morgan's Walters said on Tuesday, correctly anticipating an "ugly" post-budget slump in consumer confidence, reported on Wednesday.

AMP's chief economist Shane Oliver had been expecting the first rate hike to be around September or October but the negative reaction to the Budget could change things.

"If consumer confidence does not bounce back in the months ahead it's likely that there will be increasing talk that the next move in interest rates will be down," Dr Oliver said.

But the ANZ's economists think they can see a light at the end of the tunnel.

"There is now clearer evidence that labour demand is strengthening," they said in a report on Friday.

But they said the improvement overall should still be slow enough to allow the RBA to keep the cash rate at 2.5 per cent until next year, before a rise to 3.5 per cent during 2015.

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China mine tycoon sentenced to death

A FORMER Chinese mining tycoon has been sentenced to death for leading a crime gang that killed rivals, a state news agency reports, in a case that revealed ties between organised crime and politicians.

Liu Han is former chairman of energy conglomerate Sichuan Hanlong Group in the southwestern province of Sichuan, which owns stakes in Australian and US mines.

He disappeared in March 2013, temporarily disrupting deals to finance mine development in Nevada and Australia, before police announced he had been detained.

The death sentences for Liu Han and his brother Liu Wei were the first in trials of their 36-member gang by a court in the central province of Hubei, the Xinhua News Agency said.

Chinese President Xi Jinping has launched an anti-corruption crackdown that has ensnared senior politicians and influential businessmen.

Many of the Sichuan cases are believed linked to Zhou Yongkang, a former member of the Communist Party's Standing Committee, the country's ruling inner circle.

He is now believed to be a target of the wide-ranging graft investigation.

The Liu brothers and their associates have been charged with 15 crimes, including murder, assault, illegal detention, blackmail and operating casinos.

Prosecutors say their criminal activities, dating back to 1993, helped them amass 40 billion yuan ($A6.9 billion) in assets with businesses in finance, energy, real estate and mining, Xinhua has said.

The gang is accused in the deaths of nine people, five of whom were shot, according to earlier reports.

Police seized hand grenades, a half-dozen submachine guns, 20 pistols and other firearms.

Liu Han ranked No. 148 in 2012 on Forbes magazine's list of the richest Chinese businesspeople, with a fortune estimated at $US855 million.

He told The Wall Street Journal in 2010 that an investor once shot up his car after suffering losses in a deal.

The group is accused of fostering ties with politicians in Sichuan that helped Liu Han win appointment as a delegate of the provincial advisory body for three terms, according to earlier Xinhua reports.

Among the accused are three officials in city-level police and prosecutors' offices in Sichuan, Xinhua said.

It said Liu Wei's testimony showed the officials received money and gifts as well as weekly parties with illicit drugs.

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Metlifecare leads NZ sharemarket higher

NEW Zealand shares have gained, led by Metlifecare after the retirement village operator and developer upgraded its profit forecast.

The benchmark NZX 50 Index rose 22.534 points, or 0.4 per cent, to 5151.374 on Friday.

Within the index, 35 stocks rose, 11 fell, and four were unchanged. Turnover was $113.9 million.

Metlifecare advanced 5.3 per cent to $4.40 after the retirement village operator said it expects underlying profit of between $43m and $46m for the year ending June 30, as it benefits from higher sales, bigger capital gains on property sales and more income from resales.

Rival Summerset Group Holdings climbed 1.5 per cent to $3.51 and Ryman Healthcare fell 0.1 per cent to $8.39.

"Metlifecare, obviously a positive result ahead of the guidance they've previously provided," said Robert Garden, investment adviser at Craigs Investment Partners.

"There is a bit of a tailwind behind the sector at the moment - the companies are delivering so it is definitely a sector the market has got a lot of focus on."

F&P Healthcare rose 1.4 per cent to $4.23 after reporting full year profit up 26 per cent to $97.1 million but flagging earnings growth may stall in 2015 as a high New Zealand dollar continues to crimp its US revenue.

Chorus dropped 0.9 per cent to $1.695 after Standard & Poor's, the international ratings agency, affirmed the telecommunications network builder's BBB while changing the outlook to negative from a creditwatch with negative implications.

Outside the benchmark index, Intueri, the private education and training provider, rose 11 per cent to $2.60 in its debut on the NZX, having gone as high as $2.75.

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NZ shares snap five-day slide

NEW Zealand shares have advanced after a five-day slide gave investors confidence to buy companies offering dependable returns, including some in the property sector.

The NZX 50 Index rose 20.267 points, or 0.4 per cent, to 5128.840 on Thursday.

Within the index, 28 shares rose, 13 fell and nine were unchanged. Turnover was $143 million.

Volatility in US markets in recent months, particularly in high growth and tech stocks where investors have questioned high valuations relative to earnings, has led to greater risk aversion in equity markets, said Grant Williamson, director at Hamilton Hindin Greene.

"That has caused some investors to re-think things and put a higher portion of their funds in more conservative assets."

Gains included Argosy Property up 1.1 per cent to 96.5 cents, Precinct Properties one per cent to $1.055, Goodman Property Trust 0.5 per cent to $1.05 and Kiwi Income Trust 0.4 per cent to $1.165.

"We have seen investors take a little bit more of a conservative stance in the last couple of weeks and we are now starting to see the property trusts come back into focus, they had been underperforming for a number of months," Mr Williamson said.

"But most of them have reported pretty good results in recent days."

Steel & Tube Holdings led the index higher, up 4.1 per cent to $3.08. Air New Zealand rose 1.6 per cent to $2.17, while Fletcher Building advanced 1.4 per cent to $9.17.

Chorus fell 2.3 per cent to $1.71 after the Commerce Commission extended the deadline for its final decision on the telecommunications network operator's copper pricing.

"The share price was just starting to gain some traction from presentations that the company was making but that was all shot down following this morning's announcement that there is going to be a longer time for the determination," Mr Williamson said.

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Qld Labor leader breaks down in parliament

A Queensland Labor MP has refused to apologise for comparing fly-in, fly-out mines to the Holocaust. Source: AAP

QUEENSLAND'S Labor leader has cried in parliament while speaking about her grandfather's seven years in a Polish work camp during World War II.

Opposition Leader Annastacia Palaszczuk is under fire after Labor frontbencher Jo-Ann Miller compared fly-in, fly-out accommodation with "mining concentration camps".

Ms Palaszczuk, who is of Polish decent, became emotional as she spoke out against a government motion condemning Ms Miller's comments made in Tuesday night speech to parliament.

She broke down after recalling how a state government ministerial staff member had described the Nazis as "very admirable people", when he edited a National Party newsletter during the 1990s.

"These were the people that almost killed my grandfather, who also made my grandmother ... ," she sobbed.

"I can't believe that people on this side of the house ... about Nazis being admirable people."

The opposition leader said her grandfather's seven years in a labour camp were "very, very tough days" which almost killed him.

Ms Miller is standing by her comments, despite their allusion to the Nazi Holocaust which killed six million people across Europe.

But Ms Palaszczuk apologised for her colleague's comments.

"Her comments made in the House may have been regrettable but she was merely conveying ... the thoughts and views of people on the ground," she said.

"I have no problem with apologising for anyone who has taken offence."

Earlier, Queensland Premier Campbell Newman unfavourably compared Ms Palaszczuk with her father Henry, a Beattie government minister.

In January 2005, Mr Palaszczuk asked the Speaker to withdraw his ministerial oath of allegiance to the Queen after Prince Harry wore a Nazi uniform costume.

"Her father took a stand on a matter of principle, he showed ticker, he saw somebody do something inappropriate ... that mocked the historic outrage of the Holocaust," Mr Newman said.

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Vic health, concessions safe, premier says

THE Victorian government will maintain health services and concessions for vulnerable people despite the tough federal budget, Premier Denis Napthine has promised.

He said he had full and frank discussions with Prime Minister Tony Abbott in Melbourne on Wednesday night on the effect the $80 billion in budget cuts would have on services in Victoria from July 1 this year.

"I think he certainly had a better understanding of the concerns of myself and Victoria of the impacts of decisions with regard to concessions and some of the national partnerships in health," Dr Napthine told journalists on Thursday.

Dr Napthine said cuts to concessions and health services were totally unacceptable.

He said the state would spend $75 million to maintain concessions for needy Victorians who are subsidised for public transport and utility costs, while federal Health Minister Peter Dutton and state counterpart David Davis would begin talks on support for Victorian health services.

"We want to assure all Victorians that we will be working with the federal government to guarantee that there will be no closures of hospital beds, there will be no effect on our emergency departments and effects on our hospitals," he said.

"There may be other decisions that we have to take but in terms of frontline services in hospitals, in concessions, they will continue in the upcoming financial year," he said.

Dr Napthine rejected calls for changes to the GST to assist states but again demanded more GST revenue for Victoria.

He said Victoria's GST take was reduced from 90 cents in the dollar to 88 cents for the new financial year, but Victoria deserved a share "in the high 90s".

"I made it clear to the prime minister that I am not interested in an increase to the GST or the broadening of the base of the GST but I am very, very interested in Victoria getting a fair share of the GST," he said.

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Falling dairy prices weigh on kiwi dollar

THE New Zealand dollar has dropped to a three-week low after dairy prices extended their decline at the latest auction, and as investors get wary of a downbeat Australian economy.

The kiwi fell as low as 85.51 US cents, trading at 85.53 cents at 5pm in Wellington from 85.69 cents at 8am and 86.15 cents on Tuesday.

The trade-weighted index declined to 79.71 from 80.20 on Tuesday.

Prices at the GlobalDairyTrade auction fell for a seventh consecutive time, adding to speculation the New Zealand dollar is overvalued as Reserve Bank governor Graeme Wheeler warned this month.

A slump in Australian consumer sentiment added to the downbeat outlook for that nation's economy, sapping demand for the Australian dollar and dragging the kiwi down with it.

"Fonterra's GlobalDairy auction had another fall, its seventh consecutive decline, and that's really weighing on the kiwi," said Michael Johnston, senior trader at HiFX in Auckland.

"What the Reserve Bank had to say the other day makes it difficult to construct a scenario where you can see a sustained rally in the kiwi dollar."

Traders largely ignored local data showing net migration to New Zealand continued to rise in April, as fewer locals left for Australia, and increasing pressure on the housing market.

The kiwi fell to 86.52 yen, a two-month low, from 86.83 yen on Tuesday, was little changed at 92.63 Australian cents from 92.65 cents and dropped to 62.39 euro cents from 62.82 cents.

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Alleged egg smuggler stopped in Sydney

A CZECH man who allegedly tried to smuggle 16 bird eggs into Australia by hiding them in his pants has been charged.

The 39-year-old was frisked at Sydney Airport by customs officers after arriving from Dubai on Tuesday.

"Officers ... allegedly found 16 small eggs concealed in his groin area," Customs NSW commander Tim Fitzgerald said.

Government vets are trying to identify the species of bird.

The man was due to appear in Sydney Central Court on Wednesday facing a charge of attempting to import regulated live specimens without a permit.

The maximum penalty for such offences is a fine of up to $170,000 and/or 10 years jail.

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Qld ombudsman to pass on corruption claims

QUEENSLAND'S ombudsman will pass on anonymous corruption complaints to the state's revamped anti-corruption body even though it is losing the power to investigate nameless tip-offs.

Only children, people with disabilities and those who fear for their safety, jobs or property will be able to make complaints without signing a statutory declaration when reforms to the Crime and Misconduct Commission take effect.

The changes have been contentious, with government MP Chris Davis last week sacked as assistant health minister, in part for speaking out against them.

The Labor opposition is also opposed to the changes.

Queensland Ombudsman Phil Clarke has told a parliamentary committee it would be inappropriate for his office to follow up any corruption allegations, regardless of the complaint, under the new anti-corruption regime.

"Under the new provisions, it's likely that I would take the conservative view and if there was anything in there that substantially pointed to potential corruption ... I'd give the commission the opportunity to assess it," he said.

Independent MP Peter Wellington said constituents had asked his office if the ombudsman could investigate anonymous corruption allegations.

"People have asked if it would be appropriate for their complaint to be brought through you because the perception is ... clearly you are further removed, or not as closely connected, to the leadership of this government," he told the hearing.

The ombudsman said he didn't want to compromise the new-look body, which will be known as the Crime and Corruption Commission.

"If there is corrupt conduct ... I may, in fact, interfere with ultimately the corruption body's investigation of that matter," Mr Clarke said.

The ombudsman investigates mismanagement complaints against state and local government, public universities and administrative police matters.

The CMC's acting chairman Ken Levy is remaining in his role until a chief executive and chair are found this year.

Dr Levy has previously voiced concern about the removal of provision for anonymous complaints.

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Qld govt defends bootcamp contract

QUEENSLAND Premier Campbell Newman says he didn't know a company awarded a contract to run a juvenile bootcamp against the wishes of a departmental advisory panel was a coalition donor.

Mr Newman has been forced to defend the lucrative contract in parliament after it emerged the chief executive of the winning company Beyond Billabong later donated money to the party.

Beyond Billabong's $5500 payment was recorded by the Electoral Commission Queensland in August 2013.

When asked by Labor's Bill Byrne whether he'd launch an inquiry, Mr Newman said the donation in question was to the federal party.

"We declared it in this jurisdiction, but it was for the federal campaign ... a federal member's campaign," Mr Newman said.

"The attorney-general (Jarrod Bleijie) and I don't have any knowledge what that was about."

Beyond Billabong said the donation was proceeds from a dinner, attended by its chief executive Boyd Curran, where former prime minister John Howard was a guest speaker.

The insinuation that Mr Curran's attendance at the event was in some way connected with the awarding of the contract was unfounded and incorrect, it said.

The bootcamp, on a remote station two hours west of Ingham, was set up by Beyond Billabong in January after a Kuranda-based camp closed when its first two residents escaped and threatened staff with a knife.

The contract was awarded despite an advisory panel recommending the company not be shortlisted because its submission lacked information and would cost more than double that of its competitors.

Mr Bleijie overrode the advice of the panel after the director-general of the justice department also voiced dissatisfaction with the panel's proposal.

"I didn't want a repeat of what happened in Cairns (Kuranda)," Mr Bleijie said.

Mr Bleijie also defended the cost of the contract, saying Beyond Billabong tendered for a super bootcamp, taking in juveniles from the Cairns and Townsville regions.

And it could offer services other tenderers couldn't, he said.

"Clearly the evaluation team got it wrong," Mr Bleijie said.

"We had to have someone with experience and ability to go out bush to run a bootcamp."

Opposition Leader Annastacia Palaszczuk called for better scrutiny of all government contracts.

"'Don't you worry about that'. We've all heard that phrase before," she said.

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Iron ore plunges below $US100

The iron ore price's slide below the $US100 a tonne mark has sent nerves jangling in Canberra. Source: AAP

THE iron ore price's slide below the $US100 a tonne mark has sent nerves jangling from the Pilbara to Canberra.

The last time the commodity was that low was in September 2012.

The dramatic fall back then took markets by surprise, but this time was more expected as investment banks have slashed price forecasts for the commodity in the past month.

The situation is being partly blamed on the fact that the world's four largest iron ore miners have dramatically expanded, bringing on hundreds of millions of tonnes of new supply while China's economy is slowing.

Iron ore was Australia's biggest export last year earning $57 billion.

The Bureau of Resources and Energy Economics' prediction of a 35 per cent lift to $76 billion this year is now looking unlikely.

Treasury's forecast last week of falls to $US90 a tonne by next year look correct, which would hit what the federal government says is a budget in crisis.

Deloitte Access Economics economist Chris Richardson warned that every dollar the iron ore price sheds hits national income by $800 million and the tax take by $300 million.

The spot price dropped $US2.20 to $US98.50 overnight, meaning it has now fallen about 26 per cent this year.

Analysts have abandoned iron ore, with UBS, JP Morgan and Credit Suisse among those to downgrade their price forecasts.

Goldman Sachs is among the most bearish, predicting prices to hit $US80 a tonne next year.

"We think this is a structural decline in prices rather than anything short-lived," analyst Craig Sainsbury told AAP.

"There is an over-supply in the industry at the moment, therefore prices are suffering in what's also a reasonably low growth steel environment in China at the moment."

He thought Fortescue Metals had reason to be nervous, given its margins are slimmer than the other large producers, but did not expect a crisis as occurred during the 2012 price collapse that brought it to the brink.

Fortescue Metals shares actually shot up on Tuesday, rebounding from a 23 per cent plunge since April 9.

It announced a major increase in the size of its Greater Solomon resource.

IG market strategist Evan Lucas believes the pessimism about China was overplayed, with demand for steel products and growth strong.

While spot prices were low, futures contracts for September on China's Dalian exchange were still a healthy $US114 a tonne, he said.

"Come September they still believe and are happy to buy iron ore at $US114 a tonne," he told AAP.

He argued it was very difficult to predict iron ore prices beyond this year, given China's government might stimulate its economy and part of the current over-supply was due to a lack of disruptions in a recent mild Pilbara cyclone season.

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Melbourne sex attack accused in court

A MAN allegedly followed two women from bars on a popular Melbourne night-life strip before sexually assaulting them, a court has heard.

Adam Robertson, 37, is accused of stalking the two women separately as they left two Brunswick bars in the early hours of May 10.

Prosecutor Luke Excell told the Melbourne Magistrates Court that Robertson attended a music show at a bar in Brunswick before following one woman out as she left.

He then grabbed her in a headlock on Sydney Road, before dragging her down a side street and sexually assaulting her, Mr Excell said on Tuesday.

Robertson is accused of following another woman shortly after as she left the Brunswick Hotel, tackling her to the ground and assaulting her when she turned into a secluded road.

Both women were in their early 20s and fought off their attacker and fled, the court heard.

Robertson, of Brooklyn, has been charged with two counts of false imprisonment and two counts of indecent assault.

Police arrested Robertson in his home on Tuesday.

He was remanded in custody to face a committal mention hearing in the same court on August 14.

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Palmer United Party a cult: Barnaby Joyce

Agriculture Minister Barnaby Joyce (pic) has branded Clive Palmer's political party a cult. Source: AAP

FEDERAL frontbencher Barnaby Joyce has branded Clive Palmer's political party a cult.

The Palmer United Party will wield considerable cross-bench clout when the Senate changes in July, and its votes will be critical to the government to pass controversial elements of the budget.

Mr Joyce has warned Mr Palmer that with great power comes great responsibility.

He's hoping Mr Palmer does not turn Australia upside down.

"I've always been concerned about parties that are named after people - Palmer United Party, Katter Australia Party, Pauline Hanson, whatever, One Nation Party," he told reporters in Brisbane.

"They're not so much philosophies, they're cults."

Mr Palmer laughed off the suggestion, saying he never wanted the party to be named after him in the first place.

He said it had initially been named as the United Australia Party, but the name was too similar to a party that had already been registered - the Uniting Australia Party.

"The brand went out as Palmer United and has stayed there ever since," he told a Queensland Media Club lunch in Brisbane on Monday.

"At some stage the party will go back to its original name, I believe."

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Budget reaction could delay rate rises

THE budget is likely to affect the RBA's thinking on interest rates.

That's not all there is to it, of course.

When the RBA next moves interest rates, very likely upward, one question will dominate the decision: what level of interest rates will be needed to prevent an upsurge in inflation from being a realistic threat.

That in turn will hinge on the strength of the economy.

A strong economy generates more employment, more wages growth, more pressure on prices, than a weak one.

So the weaker the economy, the less need to restrain it using higher interest rates.

Futures market pricing shows an expectation that the cash rate will stay at its over-50-year low of 2.5 per cent until well into 2015, with a rise to only 2.75 per cent priced in for the end of the year.

In other words, the economy is not expected to pick up enough pace to strain its productive capacity - including its capacity to supply additional workers as the economy growth.

That's not an environment calling for restraint from higher interest rates.

But that could change.

A lower exchange rate, an unexpectedly slow wind-down of the mining investment boom or surprisingly strong pickup in housing construction or business investment in the rest of the economy could all bring a rate hike, and then some more, closer.

But the budget itself is likely to push it further out.

That's even though, in terms of total dollars and cents, the direction of the budget will be trivial over the coming year or so.

Policy decisions since the mid-year review of the budget in December improved the budget bottom line by just under $2 billion in the coming financial year, $6 billion in 2015/16 and just over $10 billion in 2016/17.

That sounds like an awful lot of money, but it works out to only 0.06 per cent of gross domestic product in 2014/15, rising to 0.5 per cent in 2016/17.

But the composition of the change probably works against growth in the coming year or so.

The mining tax, for example, was to be paid by mostly foreign-owned mining firms, and its intended abolition will probably make no difference to what they spend in Australia.

Abolishing the carbon tax and associated measures to promote renewable energy will reduce spending, by slowing the inevitable transition away from older, carbon-burning technologies.

On the other hand, tax and welfare measures cutting the spending power of lower-income households will reduce spending, probably dollar for dollar.

Perhaps more importantly, it looks as though the budget has had a significant negative impact on consumer confidence.

The Westpac/Melbourne Institute consumer confidence index on Wednesday will most likely confirm that.

If a big step down in confidence is confirmed, both the economy's recovery to "trend" growth and the return of interest rates to more normal levels will be pushed back further.

13.24 | 0 komentar | Read More

31 children burn to death in Colombia bus

THIRTY-ONE children are dead after fire engulfed their bus, triggering an explosion in northern Colombia.

Another 25 people including an adult were seriously burned in the blaze, in the town of Fundacion, in the department of Magdalena, Red Cross spokesman Cesar Uruena said on Monday.

"The injured have second and third-degree burns, and many are still in a critical condition" in hospitals in the area and in the city of Santa Marta, Uruena said.

The children were between the ages of one and eight and returning home after a religious service, Fundacion Mayor Luz Stella Duran told reporters.

Local police said the bus exploded around noon and the fire was so intense they had problems determining the number of casualties.

Stella Duran said according to survivors the bus driver had been handling a container with petrol aboard the vehicle. Police initially blamed the fire on a mechanical problem.

The driver has vanished, and angry locals went to his home and threw rocks at his windows, the mayor said.

Colombian President Juan Manuel Santos travelled to Fundacion after a final re-election campaign rally on Sunday in Bogota ahead of May 25 presidential elections.

"The entire country is in mourning for the death of these children," Santos said upon arriving in Fundacion, accompanied by his wife.

Santos said the government would pay for all hospital and funeral expenses relating to the accident.

The bus, which was being used by an evangelical church group, caught fire one block away from the church where the children had earlier attended services.

The Red Cross said it was sending four psychologists and two volunteer specialists in psychosocial aid to help the wounded and the relatives of those killed.

13.23 | 0 komentar | Read More

PM backs away from election threat

PM Tony Abbott appears to have backed away from his threat to hold a double dissolution election. Source: AAP

PRIME Minister Tony Abbott appears to have backed away from his threat to hold a double dissolution election over the budget, saying the cross-benchers would understand its harsher measures.

The coalition government will struggle to get the harshest of its budget measures through the Senate, with Labor, the Greens and Palmer United Party all saying they will block changes such as the Medicare co-payment and pension cuts.

But Mr Abbott said he did not think there would be a need for a double dissolution election.

Last week his comments that some of the incoming Senate cross-benchers would be unlikely to keep their seats if there was a new election was interpreted as a threat of a double dissolution.

He expected the next election in the middle of 2016, he said on Sunday.

"I am confident that the minor parties and the independents in the Senate will understand that we could not go on living the way we were - we could not go on mortgaging the future," he told ABC television.

"If they don't like what we're putting up, what are they going to put up as an alternative."

Mr Abbott said his government would not be exposing itself to a "world of political pain" unless its tough budget was absolutely necessary, after a poll showed it was facing a massive backlash.

The latest Galaxy poll, published by News Corp, found 75 per cent think they will be worse off as a result of the budget, which hiked the fuel excise, cut welfare, health and education spending, and introduced a new GP co-payment and deficit tax on the wealthy.

Mr Abbott said everyone would play their part to rein in government spending, and bring the budget back to surplus.

"I think the load is fairly shared because that's the Australian way," Mr Abbott said.

"This is all happening because we were living beyond our means. We're not doing this because we are somehow political sadomasochists."

Mr Abbott defended the tough budget measures, most of which were not flagged before the election, saying "we could not just sit here and do nothing".

"Why would I be exposing myself, why would my colleague be exposing themselves to a world of political pain if we didn't think it was absolutely necessary for the long-term good of our country?" he asked.

13.24 | 0 komentar | Read More

Budget gives Labor its voice: Shorten

Opposition Leader Bill Shorten says the federal government's "terrible" budget has united his party. Source: AAP

THE Abbott government's budget has given Labor back its voice.

That's Opposition Leader Bill Shorten's message to party members.

"This terrible budget of the Abbott government, it has defined the Labor Party," he told the Victorian ALP state conference in Melbourne on Sunday.

"Friends, the Labor party nationally has its voice back."

Mr Shorten used the speech to continue his attack on the coalition government's first budget, warning Labor will stand up for those losing out.

His fury is directed at doctor co-payments, a raised pension age, restrictions on unemployment benefits, cuts to state funding and the fuel excise.

Mr Abbott's "juvenile" paid parental scheme is also high on Mr Shorten's hit list, with the Labor leader claiming it will give millionaires $50,000 they don't need.

"See how that goes for pensioners trying to get an extra smear of Vegemite on their toast on day 13 of their budget," he said.

Mr Shorten reiterated Labor's fierce opposition to the $7 co-payment to visit a GP on Sunday and told the conference not even a cure for cancer would justify breaking Medicare.

Revenue raised from the co-payment will be fed into a medical research fund.

"But how dare you say that a cure to cancer is dependent upon wrecking Medicare," he said.

"You don't heal the sick by taxing them."

State and territory leaders held an emergency meeting in Sydney on Sunday to discuss an $80 billion hole in state budgets left by last week's budget.

Mr Shorten accused the government of using cuts to state funding for schools and hospitals to sneak in another tax.

"They are actually increasing taxes through the back door," he told party members.

The states will have no choice but to raise GST because they must continue to operate schools and hospitals, he said.

Labor call it blackmailing, a line reiterated by the Greens.

"Even a crocodile wouldn't swallow what Tony Abbott's dishing up at the moment," Mr Shorten said.

While Shadow Treasurer Chris Bowen says Labor will engage in debate about the GST, he won't commit to supporting it.

The Greens have ruled it out completely.

Treasurer Joe Hockey said the government would honour its pledge not to change the GST in this term of government.

However, the measure would be considered by a planned review of the taxation system.

13.24 | 0 komentar | Read More

Harry pays Cassino troops tribute

Prince Harry is paying tribute to Allied soldiers who died in the Battle for Mount Cassino. Source: AAP

PRINCE Harry is marking the sacrifices of Allied soldiers who fought in one of the Second World War's most infamous conflicts - the Battle for Mount Cassino.

Harry will pay tribute on Sunday (local time) to New Zealand, British and Polish troops who died trying to drive Nazi forces from Italy.

The Battle of Monte Cassino was one of the most important campaigns of the Second World War, in which Allied forces launched four battles in 1944 to remove Nazi forces from a strategically important rocky outcrop, home to the 1400 year-old Benedictine monastery of Monte Cassino.

Heavily defended, it was an obstacle to the Allies' progress to Rome as they fought their way north through the country.

The fighting force consisted of many nations from Americans and British, to Indians, Poles, Canadians, and French from North Africa, Indians, Gurkhas and New Zealanders but all had to contend with icy mountain terrain and bombardment from Nazi forces.

Progress was slow and the conflict claimed many lives becoming the bloodiest battle in Europe with an estimated 250,000 men killed or wounded.

Controversially the monastery was heavily bombed and destroyed in a bid to make a breakthrough but the move failed and the holy site was later rebuilt.

Harry will attend a Polish commemoration ceremony in Cassino and lay a wreath on behalf of the Queen and later will be a guest at a similar ceremony honouring New Zealanders who died trying to fulfil the military objective at Cassino.

Thirty eight New Zealand veterans have travelled to Italy for commemorations of the battle.

The Prince will also have a chance to visit the monastery and take in the dramatic views of the surrounding hills.

13.23 | 0 komentar | Read More