Oppn takes aim at economy as parly starts

Former Labor leader Kevin Rudd has rejected suggestions of a leadership comeback. Source: AAP

THE federal opposition used the first parliamentary sitting since the budget surplus was dumped to attack the government's economic record, as Labor declared it was putting jobs first.

The economy dominated the first question time of the election year on Tuesday as Prime Minister Julia Gillard unveiled her new-look frontbench, featuring Attorney-General Mark Dreyfus and Defence Materiel Minister Mike Kelly.

But the day for Labor wasn't all clear sailing after new testimony to a NSW corruption inquiry into the dealings of the family of former NSW Labor powerbroker Eddie Obeid referred to federal ministers Bill Shorten and Tony Burke.

With the coalition holding a clear lead over Labor in the polls, Opposition Leader Tony Abbott had earlier told the first joint party room meeting of 2013 MPs could be "confident and optimistic but never arrogant" about victory.

Mr Abbott said all members needed to be strong and measured in their criticism of the government and avoid any "personal snideness".

The warning appeared to be quickly forgotten as question time began.

"I was hoping everyone had had a nice break and we could all play nicely, but obviously not," Speaker Anna Burke said during a rowdy bout of questioning.

Shadow treasurer Joe Hockey was prevented from tabling two large bundles of documents detailing more than 500 occasions when Ms Gillard and Treasurer Wayne Swan promised a budget surplus for 2012/13.

"This is what Labor does - it completely trashes the joint, tries to claim the high moral ground and leaves Australians to pick up the pieces and pay the bills," Mr Hockey told parliament.

Mr Hockey, who has lost weight through stomach surgery and a new fitness and diet regime, had earlier told his party room the coalition had a plan to bring the budget back to surplus.

"If I'm prepared to do this to my waist, think what I'm prepared to do about Labor waste," he said.

Ms Gillard told parliament the government was facing huge writedowns in taxation revenues.

"It needs to be accounted for, obviously by the government, but it also needs to be accounted for by the opposition if it wants to be taken seriously in any sort of economic debate," Ms Gillard said.

She said Labor was focusing on jobs and growth in the economy.

The government had a strong track record of job creation, but also needed to consider policies such as the National Disability Insurance Scheme which would "protect people from the risks of a lifetime".

As well, Mr Shorten and Mr Burke became the first federal ministers to be mentioned at the NSW Independent Commission Against Corruption hearing in Sydney.

Mr Obeid said he had extended hospitality at his family's ski lodge at Perisher to many political friends including the ministers.

Mr Burke said he had stayed in an apartment owned by Mr Obeid on two occasions between 2004 and 2006 - before federal Labor won office.

Mr Shorten's spokesman told AAP the minister had never been to Perisher "and cannot ski".

The opposition also on Tuesday argued government agencies shouldn't sign major contracts because Labor was effectively in "caretaker" period since the election date was announced last week.

Mr Dreyfus said the caretaker period would not start until the lower house was dissolved in August, adding the coalition was being "irresponsible".

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RBA ready to cut rates, just not yet

THE central bank is ready to cut the cash rate again if needed but it left many consumers and businesses disappointed after its first board meeting of the year.

However, the Reserve Bank of Australia's (RBA) decision to leave the cash rate unchanged at three per cent on Tuesday did coincide with two pieces of upbeat data - the biggest quarterly rise in house prices in over two years and a sharp narrowing of the nation's trade deficit.

RBA governor Glenn Stevens said the board judged it was "prudent" to hold steady at this stage.

He said interest rate cuts over the past year or so were appropriate, given inflation is likely to be consistent with the two to three per cent target and with economic growth likely to be a little below trend over the coming year.

"The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand," Mr Stevens said in a statement.

Business groups believe the central bank should have acted now.

Financial markets are fully priced for a 25 basis point cut to an all-time low of 2.75 per cent by May.

However, Michael Blythe, the chief economist of the nation's biggest home lender, the Commonwealth Bank of Australia, believes that while the RBA has a bias to ease further, the cash rate will remain at three per cent during 2013.

He said previous rate reductions were to relieve some of the pain from a strong Australian dollar and support the transition to the non-mining parts of the economy.

"It may not be quite 'mission accomplished' but a lot of progress has been made," Mr Blythe said in a note to clients.

Treasurer Wayne Swan said homeowners were still better off by $5000 a year on a $300,000 mortgage than they were when the government came to power in 2007.

"The RBA has cut rates repeatedly over the last 15 months, partly in response to global volatility, but also because the government has been running a very strong fiscal policy," he told parliament, to jeers from opposition MPs.

Mr Stevens said downside risks in the global economy appear to have abated "for the moment at least".

Trade Minister Craig Emerson said the latest trade data confirmed the early signs of a global economic recovery and the continued strength of Asia.

The trade balance of goods and services for December was a seasonally adjusted deficit of $427 million in December, compared with a revised $2.79 billion shortfall in November.

This reflected a six per cent fall in imports and a three per cent rise in exports.

"Australian exporters are well-placed to benefit from the expected strengthening of demand in the Asian region," Dr Emerson said in a statement.

At the same time, the Australian Bureau of Statistics' house price index for the eight capital cities rose 1.6 per cent in the December quarter, the largest quarterly rise since June 2010.

Prices rose 2.1 per cent over the year.

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Doubts a coalition would return a surplus

MOST people doubt a coalition government will deliver a budget surplus in its first year of power, a new survey has found.

The weekly Essential Research online poll also found that while most people believe it is important for the federal government to deliver a budget surplus, many approved of Labor's decision not to return to the black this financial year.

The survey found 60 per cent respondents doubt a Tony Abbott-led Coalition government would deliver a budget surplus in its first year, and only 19 per cent said it probably would.

The survey of 1053 respondents found 69 per cent believed a budget surplus is important for the country, but only 54 per cent also said it was important for them personally.

However, 42 per cent approved of the government's decision to ditch its promise to return a surplus this financial year, while 37 per cent disapproved.

Just under half (48 per cent) approved of Prime Minister Julia Gillard's decision to announce a September 14 election, eight months in advance.

Thirty four per cent disapproved of her decision.

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PNG extends ban on no-confidence vote

PAPUA New Guinea's parliament has voted to extend a ban on votes of no confidence to 30 months into a government's five-year term.

PNG's opposition backed away from supporting the law, saying it will take the matter to the Supreme Court to undo it.

The bill passed into law in PNG's single House of Parliament on Tuesday with a vote of 90 to 14, well above the 74 votes needed to make the constitutional change.

Prime Minister Peter O'Neill said the law - which extends the ban from the previous 18 months - will give government more time to do its job instead of shoring up numbers to defend itself politically.

"This is not about increasing my power," Mr O'Neill said.

"It is about locking in to place the long-term political stability our nation, especially our people, have been denied for so long.

"It is a reform our people have been calling for - and most certainly our business sector, and our investors, have been calling for."

Debate on the law was gagged following a statement by Mr O'Neill and an opposition member.

Opposition leader Belden Namah and most of his 15-strong team voted against the bill, just four months after announcing their support for the measure, and he said he will follow through with court action.

One member of the opposition voted with the government.

"By this afternoon or tomorrow morning, we will file a Supreme Court reference because we have cited that in that particular amendment, it wasn't done properly," he said, telling reporters the law was not documented properly.

The man who just eight months ago was Mr O'Neill's deputy said the law was not about stability, but about concentrating power in the PM.

"What has happened now - those who voted for the bill - have become insignificant," he told journalists following the vote.

"They have weakened their own bargaining and negotiating power for projects in their districts. It's as simple as that.

"They have put themselves into voluntary exile ... from now on, Peter O'Neill is the most powerful man in the country."

PNG has lost two prime ministers to votes of no confidence since independence in 1975 - Sir Michael Somare and Paias Wingti.

However, the threat of a vote has been a significant part of the Pacific nation's political makeup, causing its prime ministers to become entrenched in money politics to keep colleagues on side.

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NT govt still fighting to save Nhulunbuy

NT Chief Minister Terry Mills is continuing his fight to save an alumina refinery and the outback town that relies on it, despite a company report indicating the plant should be shut.

On Monday Mr Mills flew to Canberra and met Resources Minister Martin Ferguson, Opposition Leader Tony Abbott and others.

"All I can say at this point is that there has been welcome cooperation from Minister Ferguson and also from the Coalition," Mr Mills said after the meetings.

"Finding creative solutions to challenging problems," he told the ABC.

Mr Mills will be travelling to Singapore, Milan and London as he attempts to find a way to convince mining giant Rio Tinto Ltd to keep the plant operating.

A strategic review undertaken by Rio subsidiary Pacific Aluminium had recommended the plant be temporarily closed, Mr Mills has said.

"A recommendation from the investment review committee was to mothball it," he told the NT News.

The strategic review was handed to Rio Tinto on January 31, with the mining giant expected to make a decision on whether to close the Gove refinery soon.

The refinery employs about 1200 people, and has been losing about $30 million each month due to the high Australian dollar, low aluminium prices and the steep cost of running the plant, which is powered by diesel.

Any moves to close the plant are expected to devastate the economy of the satellite town of Nhulunbuy, which has a population of about 3500, and flow-on effects could lead to hardship for nearby Aboriginal communities.

Pacific Aluminium has hinted that if the Northern Territory government can provide natural gas to power the refinery it will reconsider moves to close down the plant.

But the plant would use about as much gas as currently is needed to power the whole of the NT, and allocating the refinery enough gas could lead to gas shortages elsewhere.

There is currently no pipeline to take the gas to the refinery, and Rio Tinto is believed to also want the federal government to underwrite the $1 billion investment.

On Monday Dave Suter from the Nhulunbuy Chamber of Commerce and Industry said people in the town were anxiously awaiting news from Rio Tinto.

"Everyone is a bit edgy about what is happening," he said.

Mr Suter said even if the review recommended the plant be mothballed, the context of the recommendation was important.

"It could potentially say that it should be mothballed until they get gas," he said.

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NT officer suspended on child sex charge

A NT police officer has been suspended after being charged with having sex with a child. Source: AAP

A NORTHERN Territory police officer has been suspended from duties after being charged with having sex with a child.

The identity of the 30-year-old cannot be revealed for legal reasons, but he appeared in the Darwin Magistrates Court on Monday.

Police have confirmed the officer was suspended from duty, but as the case is before the court they do not wish to release further details.

The matter was adjourned until April 3.

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Bushfire approaches east of Boddington

A BUSHFIRE is approaching the town of Ranford and the Golden Hills Estate near Boddington in Western Australia's Peel region.

A "watch and act" warning for the area was issued by the state's Department of Fire and Emergency Services at 3.10pm (WST).

The warning includes Mitchell Crescent, Sherry Close and Littleton Rise.

There is a possible threat to lives and homes as the fire is out of control and unpredictable.

The blaze is moving fast in a north easterly direction and spot fires are starting ahead of the main fire.

Residents have been warned that it isn't safe to stay and defend their homes, so they should leave now if the way is clear.

People who aren't at home are warned against trying to return as conditions in the area could be very dangerous.

Motorists should avoid the area.

Fire crews are on the scene and are being assisted by aerial support.

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Further back-burning at Vic bushfire site

A 300-hectare backburn near a Victorian alpine region bushfire has been a success, authorities say. Source: AAP

FIREFIGHTERS are undertaking a major back-burning operation around a blaze in Victoria's alpine region ahead of hot and dry weather later this week.

A 200-hectare burn was started near Mount Hotham about 4pm (AEDT) on Monday as the first part of a larger operation to burn from the Great Alpine Road, Harrietville-Feathertop fire incident controller Tony Long said.

Mr Long said the fire, which has already burnt more than 6400 hectares of the Alpine National Park, would increase in size while the burning is undertaken over the next few days.

He said the back-burning aimed to limit the fire's potential spread and help protect communities at Mount Hotham and Dinner Plain ahead of worsening weather conditions.

"It's important that we undertake back-burning when conditions are favourable, ahead of hot and dry conditions forecast later this week," Mr Long said in a statement.

The operation follows a successful 300-hectare back-burn south of the township of Harrietville on Sunday night.

"We have been waiting for the right conditions to undertake this back-burning for several days and our patience was rewarded with the burn going completely according to plan last night," Mr Long said.

The fire was started by lightning on January 21 and has at times threatened Hotham Heights, Dinner Plain and Mount Hotham, a popular ski field about 360km northeast of Melbourne.

Communities around Bright, Harrietville and Mount Hotham have been told that increased smoke is likely to be visible over the next few days while the burning is completed and patrolled.

The Great Alpine Road remains closed between Harrietville and Mount Hotham.

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US condemns Ankara embassy bombing

The US has condemned the suicide bombing outside its Ankara embassy, calling it an "act of terror". Source: AAP

THE White House has condemned a suicide bombing outside the US embassy in Ankara as a "terrorist attack", but said it did not yet know who was behind it.

"We strongly condemn what was a suicide attack against our embassy in Ankara, which took place at the embassy's outer security perimeter," White House spokesman Jay Carney said on Friday.

A Turkish security guard was killed and several other people were wounded in the explosion, which also damaged nearby buildings.

"A suicide bombing on the perimeter of an embassy is by definition an act of terror. It is a terrorist attack," said Carney.

"However, we do not know at this point who is responsible or the motivations behind the attack. The attack itself is clearly an act of terror."

He said the United States was working closely with Turkish authorities "to investigate the incident and bring the perpetrators to justice".

The bombing at a security roadblock near the entrance to the highly-fortified embassy in an upmarket area of the capital was the latest in a series of attacks on American missions in the Muslim world.

Vice President Joe Biden, on a visit to Germany, said the bomber was believed to be a member of an illegal "left wing terrorist organisation", without elaborating.

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High-level security talks begin in Germany

High-level officials have begun security talks in Germany with Syria, Mali and Iran on the agenda. Source: AAP

HIGH-LEVEL officials, diplomats, ministers and top military brass have kicked off three days of talks at the Munich Security Conference amid a US warning to Iran over stalled nuclear talks.

US Vice-President Joe Biden, who is due to attend the Munich talks on Saturday, began a three-nation European tour cautioning Iran that the opportunity for talks with the West over Tehran's contested nuclear program was not open-ended.

A day after meeting Chancellor Angela Merkel in Berlin, freshly inaugurated Biden is due to address participants in Munich on Saturday and turn his attentions to Syria amid fears the conflict may spill over the country's borders.

He is scheduled to meet Russian Foreign Minister Sergei Lavrov and Syrian opposition chief Moaz al-Khatib, and also see UN-Arab League envoy to Syria Lakhdar Brahimi in the southern German city, the White House said.

Outgoing US Secretary of State Hillary Clinton said Iran is stepping up support for the Syrian regime and that Russia is still arming it, heightening concerns after Damascus threatened to retaliate over a reported Israeli air raid.

"What we would like to see from other countries, including Russia, is an acknowledgment that (Syrian President) Bashar al-Assad must go and that there needs to be a transition within Syria to a new government," said Ben Rhodes, a White House national security adviser.

Brahimi and al-Khatib take part in late-night talks on Syria in Munich on Friday.

NATO's plan to withdraw the bulk of its 100,000 combat troops from Afghanistan by the end of 2014 as well as developments in the Muslim and Arab world two years after the Arab Spring revolts are also set to be themes here.

German Finance Minister Wolfgang Schaeuble and Spanish Foreign Minister Jose Manuel Garcia-Margallo join a discussion on the euro crisis and the EU's future later on Friday, when energy issues are also a focus.

Opening the conference on Friday, German Defence Minister Thomas de Maiziere said he was optimistic that the US and Europe could rely on each other and must be able to do so even as both regions turn towards Asia.

"For the US, Europe may not be the best conceivable partner in the world, but it is without any doubt the best possible partner," he said.

Iranian Foreign Minister Ali Akbar Salehi is expected to attend the Munich talks as well as EU foreign policy chief Catherine Ashton, who represents the so-called P5+1 group of the United States, China, Russia, Britain, France and Germany in talks on Iran's nuclear ambitions.

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