Aust share market closes 0.5% higher

THE Australian share market closed half a percentage point higher as investors chased higher yielding financial stocks.

At the close on Friday, the benchmark S&P/ASX200 index was 25.0 points, or 0.52 per cent higher at 4,835.2, while the broader All Ordinaries index was up 25.1 points, or 0.52 per cent, at 4,858.9.

On the ASX 24, the March share price index futures contract was 23 points higher at 4,804, with 22,953 contracts traded.

IG Markets analyst Stan Shamu said investors had been drawn to high yielding financial stocks.

"It's all been about the defensive names, particularly the yield plays in the banking sector," Mr Shamu said.

Commonwealth Bank retested an all time high of $63.70 on Friday before closing at $63.59, up 0.55 per cent for the day.

Westpac closed 1.7 per cent higher at $27.55 and Macquarie was 2.5 per cent higher at $37.99.

NAB gained 0.55 per cent to $27.24 while ANZ firmed 0.3 per cent to $26.07.

"With downward pressure in interest rates everyone continues to chase that yield play."

Data released on Thursday showed that China's manufacturing activity had reached a two-year high.

On Wall Street overnight, the Dow Jones Industrial Average gained 0.33 per cent to 13,825.33 points.

On the local market womenswear retailer Specialty Fashion Group had soared 27 cents, or 38.57 per cent, to 97 cents.

The owner of the Katies and Millers chains says it expects its first-half profit to nearly triple due to cost savings and improved sales.

Sleep disorder specialist ResMed gained 30 cents, or seven per cent, at $4.58, after posting a 24 per cent increase in its second quarter net income, ahead of market expectations.

Construction giant Leighton Holdings advanced 92 cents to $20.00 after announcing its subsidiary Thiess had won a $175 million maintenance contract with Sydney Water.

In the resources sector, global miner BHP Billiton was six cents weaker at $37.10, and Rio Tinto shed 23 cents to $66.06.

Atlas Iron nudged up 0.5 per cent to $1.575 after meeting expectations with its second quarter production results.

Penrice Soda shares were flat as chairman David Trebeck launched an angry attack on dissident shareholder London City Equities (LCE) after he survived Australia's first two strikes board spill meeting.

National turnover was 1.9 billion shares worth $6.68 billion, with 541 stocks up, 456 down and 346 unchanged.

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Gladstone isolated by Qld flooding

SEWAGE bubbling up out of grates and flowing into the streets of a central Queensland city does not pose a health risk, the city's mayor says.

Gladstone Mayor Gail Sellers says her region has been inundated with rain from ex-tropical cyclone Oswald, which is bearing south down Queensland's east coast.

Ms Sellers says authorities have been notified about sewage rising up into the streets but residents should not be concerned.

"The reason it's not a problem is it's so diluted," Ms Sellers told AAP.

"We've got so much water here, it's so diluted, it's not a health risk and we're dealing with it."

Ms Sellers said road access to Gladstone had been cut from all directions but she did not expect it to remain that way for long.

But if the Bruce Highway was cut for an extended period, there could be supply problems, she said.

Ms Sellers said the city was still not clear of Oswald's wrath, with more rain and 90km/h winds predicted across the region.

But the mayor was optimistic there would not be much damage, given the city had already dealt with 600mm of rain in the past two days but only experienced minor localised flooding.

"Our staff here at council have been working hard, they've been here all night, so we're over it," she said.

The city's harbour has been closed, the region's national parks are shut and Gladstone's Australia Day celebrations on Saturday have been cancelled.

However, Gladstone Airport has been cleared of water and remains open.

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Gaynor to fight suspension over gay jibe

DISENDORSED Senate nominee Bernard Gaynor plans to fight suspension from Bob Katter's Australian Party and insists its leadership shares his controversial views about gay teachers.

Mr Gaynor was suspended by KAP on Thursday after saying he wouldn't let gay teachers educate his children.

He courted further controversy on Friday by supporting comments made by western Sydney KAP candidate Jamie Cavanough, who said he won't buy halal meat because the proceeds go to Muslims.

In a statement on Friday, Mr Gaynor said he was disappointed to have been suspended from the party "for stating an opinion that the party leadership personally supported".

He added: "The last time I spoke to Bob Katter he commended my moral courage."

Mr Gaynor, an Iraq war veteran, was the KAP's Queensland Senate nominee but his suspension means the candidacy is terminated.

Mr Cavanough issued a sometimes muddled statement apologising for offence caused by his comments about halal meat.

He denied being racist and made the bizarre claim his campaign for the seat of Greenway would not be focused on "social and moral issues".

"I Jamie Cavanough in no capacity accept the fact that I am racist," he said.

"I sincerely apologise if my posts offended anyone.

"... My campaign will not nor will ever be focused on social and moral issues."

KAP national director Aidan McLindon tried to defuse the situation by comparing the choice of halal and non-halal meat to consumer preference of peanut butters.

"Some Australians want crunchy peanut butter, others want smooth peanut butter," he said in a statement.

"Some Australians want halal meat and some want non-halal meat - these are just some of the great freedoms we enjoy in this country."

A third KAP candidate, Tess Corbett, has withdrawn her candidacy after telling Victoria's Hamilton Spectator newspaper she didn't believe gay people should have the same rights as heterosexuals.

Ms Corbett was due to contest the Victorian Liberal-held federal seat of Wannon.

Mr Katter defended his party on Thursday night during an interview with the Ten Network.

"The party will not tolerate people, using our good name, to promote their own personal preoccupations and predilections."

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Katter's party suspends Gaynor

Federal MP Bob Katter's party warned its candidates not to promote their "personal preoccupations". Source: AAP

KATTER'S Australian Party has suspended Queensland senate candidate Bernard Gaynor over homophobic comments made on social networking site Twitter.

Mr Gaynor, a father of five, posted on Wednesday night: "I wouldn't let a gay person teach my children and I am not afraid to say it."

KAP National Director Aidan McLindon on Thursday announced Mr Gaynor's party membership had been suspended.

"The party has made it perfectly clear on a number of occasions to all candidates and officials that KAP does not exist for individuals to air and promote their own personal preoccupations," he said in a statement.

"For this reason and as a result of serious breaches of protocol the party has suspended Mr Gaynor's membership.

"As a result of this decision Mr Gaynor's nomination for senate candidacy becomes invalid.

"As is with all other democratic institutions, the member may exercise his right to show cause.

"The party is determined to continue with its core objectives in restoring our freedoms and building prosperity for all Australians."

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Japan reports record trade deficit

JAPAN has reported a record trade deficit for 2012, a year in which exports were hit by a bitter diplomatic spat with China and plunging demand in Europe.

Official figures from the finance ministry showed Japan's trade shortfall last year totalled Y6.92 trillion ($A74.21 billion), with the deficit in December alone standing at a higher-than-expected Y641.5 billion ($A6.88 billion).

The data marked a second consecutive annual trade deficit for the export-reliant economy.

The gloomy numbers spell more bad news for the world's third-largest economy as it struggles to recover from the 2011 quake-tsunami and the impact of an export-sapping strong yen.

They also underscore the size of the task ahead for the new government of Shinzo Abe, who won last month's election on a pledge to boost the economy with big public spending and by pressuring the central bank for a more aggressive monetary policy.

Last year, exports totalled Y63.7 trillion against imports of Y70.7 trillion, with post-Fukushima energy imports of expensive fossil fuels surging as all but two of Japan's 50 nuclear reactors were closed.

But analysts said the 2012 figures may mark a low point for Japan's trade picture as the global economy stages a recovery.

"The figures will likely be better in 2013 as overseas economies improve," said Masahiko Hashimoto, an economist at Daiwa Institute of Research in Tokyo, adding that the impact of a territorial feud with China would probably fade.

"The European economy may continue to worsen until the middle of the year but China and other Asian economies are likely to lead the global economy."

However, he said the deficit would likely remain for the short term as a weakening yen makes overseas energy imports pricier, Hashimoto said.

Japan ran a 2012 trade surplus with the US, but recorded a deficit of Y139.7 billion with the European Union, its first.

The deficit with Beijing doubled to a record Y3.52 trillion as a feud over a set of islands in the East China Sea spurred a Chinese consumer boycott of Japanese.

On Tuesday, the Bank of Japan, following government pressure, adopted a two per cent inflation target to beat the deflation that has haunted the economy for years and also set out plans for indefinite monetary easing.

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Canberra fires prompt research into blazes

LITTLE was known about freak weather phenomena like fire tornadoes or "violent pyroconvection" when suburbs on Canberra's outskirts were engulfed by bushfires in 2003.

But understanding has improved greatly since those January blazes killed four people and destroyed more than 500 homes and businesses in the nation's capital.

Australian scientists and international researchers have since discovered several rare climate events occurred during that firestorm, and hope their findings will help firefighters save lives.

On Thursday some of the research will be presented at the CSIRO Discovery Centre in the city where the disaster unfolded.

Scientist Rick McRae hopes their discoveries will help "pull apart the true story of what was going on" in January 2003.

"It was a very unusual day," Mr McRae, special risk analyst with the ACT Emergency Services Agency, said of January 18, 2003.

"Back 10 years ago, a lot of this stuff really was poorly known, if known at all."

Mr McRae garnered attention last year when he and other scientists documented the first-ever confirmed case of a "fire tornado" using evidence from the Canberra fires.

Canberra "got the ball rolling" as researchers from across the globe studied the other unusual weather phenomena that occurred during the blazes, he said.

They've now identified several examples of "violent pyroconvection", or events that create dynamics in the atmosphere above a fire that dominate what's going on on the ground.

One was the formation of massive thunderstorms in the smoke cloud known as "pyrocumulonimbus" that can cause rain, hail and lightning.

Another was the discovery of "fire channelling", where a blaze rapidly spreads in two directions at once.

Researchers have since identified this extreme fire pattern as having occurred not only at Canberra but during the 2009 Black Saturday fires in Victoria and blazes this month in Warrumbungle National Park in NSW.

It could even be taking place right now in fires around Harrietville in Victoria, Mr McRae added.

"We've seen the signature of this in a lot of the dangerous fires, both in Australia and the United States and elsewhere," he said.

By understanding how and why a fire takes a dangerous turn, fire crews can maximise their safety as they battle blazes, Mr McRae added.

"With the increase in science and the increase in knowledge about what makes bad fires bad, we're learning a lot more about how to better protect our communities," he said.

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Rio Tinto defends two-tiered redundancies

RESOURCES giant Rio Tinto's decision to give non-union coal miners tens of thousands more in redundancy payouts could have wider industry repercussions if a union's legal challenge succeeds.

Operations at the Blair Athol open-cut mine, near Clermont in central Queensland, finished in November 2012, following a 28-year production run that saw coal shipped to Japan.

But workers on individual contracts were given much more generous payouts than those on collective agreements.

The Construction Forestry Mining and Energy Union (CFMEU) has filed a claim in the Federal Court's NSW registry, arguing the differing levels of redundancy pay discriminate against union members, and are in breach of the Fair Work Act.

The union's Sydney-based national legal director, Alex Bukarica, said the case could have wider consequences if the CFMEU has a win.

"It will test whether a company can apply its own policy in a discriminatory way," he told AAP on Wednesday.

"If we're successful ... it will have ramifications if other companies are adopting the same practices."

Rio Tinto has argued its redundancy payout system is fair.

The CFMEU says that when 70 full-time production and engineering staff were made redundant last year, non-union employees were given a redundancy payout based on their entire salary, including compulsory overtime and bonuses.

They were also given an extra three months' pay as part of their redundancy.

Conversely, unionised staff were given redundancy payments based on their base salary only.

"They have treated them less favourably because they have chosen to bargain collectively," Mr Bukarica said.

For a retrenched worker on an average $120,000 base salary, that could mean the difference between a union member walking away with $80,000 and an individual contract employee leaving with more than $150,000, he said.

Rio Tinto has defended its practice of having a two-tiered redundancy scheme, arguing union members on collective agreements had benefitted from secure working conditions.

"Employees at Blair Athol Mine were able to choose whether they worked under the collective agreement or on individual arrangements," a company spokesman said in a statement.

"Redundancy payments were made in accordance with the employee's conditions of employment, which Rio Tinto believes was fair."

The Federal Court matter is due to be heard in March.

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McGowan needs MacGyver to beat the Emperor

POLLS suggest WA Labor leader Mark McGowan will need a MacGyver-like miracle to win the West Australian election on March 9.

MacGyver, played by Richard Dean Anderson, will be in Perth for Oz Comic-Con on March 9 - the day of the state election.

And as campaigning by the major parties started in earnest this week, McGowan may need to borrow some of the TV detective's improbable improvisational skills if he is to fashion an unlikely election win out of what seems a hopeless predicament.

The latest Westpoll this week showed the coalition with a huge 59 to 41 two-party-preferred lead over Labor, with Mr McGowan earning a 35 per cent approval rating from those questioned.

That is just two points higher than his predecessor Eric Ripper, who was shunted last January, with former Liberal senator-turned-lobbyist Noel Crichton-Browne labelling him one of the worst leaders in WA Labor history after a poor performance in opinion polls.

And so while grumbles still simmer around Colin Barnett's premiership, and internal polling suggests a much closer race in the state's marginal seats, an alternative government seems impossible to contemplate for the WA electorate.

"The Labor Party have to begin to cut through, but the policies they have put up so far seem to be insipid, inconsequential, irrelevant, trivial - they don't go to the heart of the issues that change people's votes," said Noel Crichton-Browne, former Liberal senator turned influential WA lobbyist.

"Mark McGowan has a very poor standing, which is reflective on the Labor Party.

"What does he stand for? Tell us where he stands on the carbon tax. Tell us where he stands on the resources rent tax. Tell us whether he is going to stand up to the federal Labor government.

"Get away from the notion that he is weak, that he vacillates on issues, he is not committed to anything, that he lacks gravitas, he lacks seriousness, he lacks standing, and he lacks presence.

"He does not look like a leader, or like a premier."

Appearing alongside MacGyver at the March 9 Oz Comic-Con event will be William Shatner, whose most famous role was as the autonomous leader of a diverse but obedient crew far from anywhere in the original Star Trek series.

Of course Mr Barnett is no James T Kirk.

But it is WA's enterprise and booming economy that has enabled him to launch a transformative development of Perth and beyond in the past four years, while also becoming a major political thorn in the side of Prime Minister Julia Gillard and Treasurer Wayne Swan.

Since stunning then-Premier Alan Carpenter in 2008, Barnett's vocal dissent against the supposed federal cash grab out of WA has raised his profile both at home and in the east - a little too far for the comfort of some.

Various controversies along the way, like the claim air-conditioning in Perth was not essential, or naming the city's $2.6 billion riverside development after Queen Elizabeth with no consultation, have led to the tag of 'Emperor Barnett', along with a new $26 million office to complete the image.

According to Mr Crichton-Browne, the premier's monarchical air is both a major strength and an Achilles' heel.

"Colin has some failings - he gives the impression he is uncaring and insensitive, and that he can't tolerate another view," Mr Crichton-Browne said.

"But he is very able, he is very competent, he is across the suite of all portfolios, he is head and shoulders above everyone else in politics in WA."

Without the intervention of MacGyver, a cauliflower crate, some old air conditioning piping and a chainsaw, Mr Barnett appears set to stay there.

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Man in hospital after Sydney cliff plunge

A MAN has plunged more than four-and-a-half metres from a cliff in a national park south of Sydney.

The 28-year-old man from Mosman fell off the cliff in the Royal National Park on Wednesday shortly after 1.30pm (AEDT), Westpac rescue helicopter said in a statement.

A helicopter found him at the southern end of Garie Beach.

He was treated for head and spinal injuries and has been taken to St George Hospital, where he is in a stable condition.

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ASA surprises with Penrice board vote

TROUBLED chemicals manufacturer Penrice Soda has been taken by surprise with a decision by the Australian Shareholders' Association to support both the incumbent and challenging directors at this Friday's board spill meeting.

The Australian Shareholders' Association (ASA) says it will support Penrice's chairman and deputy chairman in their re-election bid but will also support three candidates nominated by dissident shareholder London City Equities (LCE).

Penrice chairman David Trebeck told AAP he was surprised at the ASA's decision and said having all five directors on the company's board would not be workable.

"Heck no," Mr Trebeck said when asked if such an arrangement could work.

"It's exactly the thing that we have been speaking against."

Adelaide-based Penrice will be the first company to face an extraordinary general meeting to vote on a board spill after receiving successive votes against its remuneration report at the past two annual general meetings under the "two strikes" rule.

The company, which announced on January 18 it would cease local production of soda ash in favour of imports and cut 60 jobs, has been subject to a fierce battle between the incumbent board and LCE, which has pushed for board renewal in the face of sustained losses and falling share prices.

The ASA, in a report posted on its website on Monday, said while it had initially opposed a board spill, it now believed the Penrice board should have at least one new member "to introduce the discipline of truly independent thinking".

The ASA monitors said that while three additional board members "might not be workable", all three new candidates - John Harvey, Shay McQuade and Mike Carter - were suitable and no order of priority could be decided.

The monitors said their position may change before the meeting.

In a letter to shareholders ahead of Friday's meeting, Mr Trebeck said the three new candidates "lack public company governance experience and are unlikely to bring any new insights into Penrice".

Penrice shares peaked at $2.10 in 2005 and closed on Tuesday one cent lower at 12 cents.

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