Rudd in Indonesia for bilateral talks

PRIME Minister Kevin Rudd will discuss trade and the asylum seeker issue with Indonesian President Susilo Bambang Yudhoyono.

But he has hosed down speculation about an imminent deal with Indonesia to fight people smuggling and stem the flow of asylum seeker boats to Australia.

The prime minister reiterated that asylum seeker policies were not "etched in stone" shortly after arriving in Indonesia on Thursday.

Mr Rudd's Friday meeting with President Yudhoyono will take the "overall temperature" of the relationship between the two countries, he has said.

While there, he's expected to also respond further to his decision to allow the ALP national executive licence to intervene in the workings of the NSW branch to root out corruption in its ranks.

Opposition Leader Tony Abbott will be in Sydney.

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Bank of England hints at interest rate cut

THE Bank of England has hinted that it is unlikely to lift record-low borrowing costs any time soon after wrapping up the first policy meeting led by its new governor, Canadian Mark Carney.

The BoE's nine committee members, including Carney, voted by majority to keep the central bank's main lending rate at an all-time low point of 0.50 per cent and decided also to stick by the amount of new money being used to help stimulate the British economy.

But the unexpected hint over the outlook for rates contained in a longer-than-usual final statement, issued at the conclusion of the BoE's latest monthly meeting, caused investors to offload sterling and buy British-listed shares.

"The clear impression is that a Carney-led BoE has a distinctly dovish bias," said Royal Bank of Scotland economist Ross Walker.

"The statement sends a clear, decisive signal - Mr Carney has not spurned an opportunity to provide early guidance, which we expect to be supplemented in subsequent months."

The British pound dived to $US1.5062, the lowest point since May 29, in reaction to receding expectation of a rate hike.

London's FTSE index of leading companies meanwhile soared by more than 3.0 per cent in afternoon trade. Lower interest rates decrease a currency's value but can boost companies' profits.

Recent yields, or rates of return, offered to buyers of government debt have risen in recent times, pointing to impending higher interest rates for consumers in general.

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ECB promises low interest rates

THE European Central Bank has promised to keep its interest rates at current record low levels for an "extended period".

ECB President Mario Draghi says there could even be a cut to support the ailing eurozone economy.

Seeking to calm worries about Portugal, where a political crisis sparked by austerity has rocked markets and driven up borrowing rates this week, Draghi assured that the country "is in safe hands".

The ECB's governing council voted to hold its key interest rate at an all-time low of 0.50 per cent for the third month in a row.

Draghi vowed that "monetary policy will remain accommodative for as long as necessary," in remarks to a press conference.

The ECB's decision-making governing council "expects the key ECB interest rates to remain at present or lower levels for an extended period of time," Draghi said.

"Our exit (from low interest rates) is very distant."

The comments pushed the euro down against the US dollar, but triggered a rally in stock prices all around Europe, since it was the first time that the ECB has ever given such forward guidance.

Draghi's comments came shortly after the Bank of England in London also hinted that it would not lift record-low borrowing costs in the short term.

The decision to issue such "unprecedented forward guidance" was "unanimous", the ECB chief added.

"We had an extensive discussion about a possible interest rate cut," he said.

"But after this extensive debate, we basically unanimously agreed about this forward guidance," Draghi said.

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Turn off Mandela life support, family told

DOCTORS treating Nelson Mandela say he is in a "permanent vegetative state" and have advised his family to turn off his life support machine.

"He is in a permanent vegetative state and is assisted in breathing by a life support machine," said a legal filing related to a family dispute over reburying the remains of Mandela's three children.

"The Mandela family have been advised by the medical practitioners that his life support machine should be switched off."

AFP

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UK police reopen Madeleine McCann case

BRITISH police are opening their own investigation into the 2007 disappearance of toddler Madeleine McCann in Portugal.

They have identified 38 people of interest across Europe.

A two-year review of the original Portuguese investigation, which is officially closed, had resulted in some new evidence, said Detective Chief Inspector Andy Redwood of Scotland Yard, the officer in charge of the probe.

Police also still believe that Madeleine, who was three when she disappeared, may be alive, he said.

"We have identified 38 persons of interest from a number of European countries. Twelve of those people are UK nationals who we believe were in Portugal at the time Madeleine disappeared," Redwood said.

Neither Madeleine's parents Gerry and Kate, nor the friends who were having dinner with the McCanns when she disappeared, were among the suspects.

The McCanns say it is a "huge step forward" in their ongoing search for their daughter.

The couple launched a global campaign to find Madeleine after she vanished from the family's holiday flat in Praia da Luz on Portugal's south coast in May 2007, while they were eating dinner nearby.

Pictures of the smiling blonde girl was plastered on newspapers, posters and websites across the world, although numerous possible sightings came to nothing.

Scotland Yard say they believe she is still alive.

Since the ongoing review was launched in 2011, British police have gathered more than 30,000 documents, visited Portugal 16 times, carried out new witness interviews and generated new theories.

"The review has given us new thinking, new theories, new evidence and new witnesses," Redwood said.

"That has given us the ability to see this case with fresh eyes."

He added: "I believe critically that this is an important moment for Madeleine."

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Egypt security slaps travel ban on Morsi

EGYPTIAN security forces have imposed a travel ban on President Mohamed Morsi and several top Islamist allies over their involvement in a prison escape in 2011, security officials say.

Airport officials confirmed to AFP that they had received orders to prevent the leaders -- including Morsi, Muslim Brotherhood chief Mohammed Badie and his deputy Khairat al-Shater -- from travelling abroad.

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N. Korea restores hotline with South

NORTH Korea has restored its hotline with South Korea and announced it would let the South's businessmen visit a shuttered joint industrial zone, Seoul officials say.

The move came hours after dozens of South Korean firms threatened to withdraw from the zone at Kaesong in the North, complaining they had fallen victim to political bickering between the two rivals.

"The hotline was restored this afternoon after North Korea accepted our request to normalise it," a South Korean unification ministry official said on condition of anonymity.

The move followed months of high tensions and threats by Pyongyang of nuclear war.

As tensions began easing last month, the North restored the hotline across the border truce village of Panmunjom for talks on setting up a high-level meeting to discuss the fate of the zone.

But the line was switched off again after plans for the talks collapsed due to disputes over protocol.

The Kaesong estate, where North Koreans work in Seoul-owned factories, was the most high-profile casualty of the months of elevated tensions that followed the North's nuclear test in February.

Operations at the complex just north of the border ground to a halt soon after the North banned entry by the South's factory managers and other officials on April 3.

About a week later Pyongyang pulled all its own workers out.

In an unexpected change of course on Wednesday, the North sent a message to the South saying South Korean businessmen and managers would be allowed to visit the complex.

It said the businessmen could take emergency steps to avert damage to facilities and materials during the rainy season, according to a unification ministry statement.

South Korean managers could have talks with their North Korean counterparts during their trip, it said.

The North's invitation sparked speculation that it may be ready for dialogue with the South.

But South Korea responded cautiously, saying it would review the proposal and convey its response later.

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NSW Labor placed under administration

THE NSW Labor Party has been placed under the administration of the ALP national executive in a bid to end corruption and limit union influence.

Prime Minister Kevin Rudd and NSW Labor boss Sam Dastyari secured the agreement, aimed at improving the party's image after damning revelations about former MPs' conduct came to light during hearings at the state's corruption watchdog.

News Ltd reports that Mr Dastyari will be handed absolute power by the Prime Minister and the national executive to begin the reforms.

They include a policy of zero-tolerance under which MPs will be expelled if they are investigated for corruption.

The administrative committee of NSW Labor is expected to be sacked.

Presently 80 per cent of the NSW administration is comprised of union officials.

This will be changed under the reforms and Mr Rudd and Mr Dastyari are seeking to have 50 per cent of the new administration made up from rank-and-file members.

"We need to not only clean it up, we need to look like we are cleaning it up," a senior NSW federal MP told News Ltd.

"It's a courageous and necessary move."

Under the move, property developers will be prohibited from seeking preselection for the party at state and federal levels, News Ltd reports.

Unions could be angered by the plan, but Mr Rudd told News Ltd he "had a gutful of this stuff,"

"Labor party members have had a gutful of this and so has the nation," he told News Ltd.

"It must now be fundamentally changed."

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Past decade hottest on record, says UN

THE 21st century's first decade was the hottest on record, with temperatures rising at an unprecedented pace and weather extremes claiming over 370,000 lives, the United Nations says.

In a new report on 2001-2010, the World Meteorological Organization (WMO) said land and sea temperatures averaged 14.47 degrees Celsius.

This compares with the long-term average of 14 C, as measured from weather records dating back to 1881.

"This is the warmest decade of this whole period," said WMO chief Michel Jarraud.

When measured globally, every year of the decade except 2008 was among the 10 warmest on record, the report showed.

"The increase between the 1990s and the past decade is the largest since we have instrumental records," Jarraud added.

In 2001-2010, the average global temperature jumped 0.21 degrees over the previous decade. By comparison, warming rose by 0.14 C in the 1990s over the 1980s.

Global warming is blamed on human activity such as industrial emissions of heat-trapping greenhouse gases, chiefly carbon dioxide (CO2).

Sceptics, however, suggest temperatures should be even higher according to estimates based on CO2 levels and that global warming is therefore plateauing.

"There's no plateau. If you filter out the very short-term variability, the last decade was the warmest by a significant margin," Jarraud countered.

He backed suggestions that heat is being stored in the deep ocean, where it was bound to released in the future.

Based on surveys of 139 countries, the WMO report showed that nearly 94 per cent registered their warmest decade in 2001-2010, while 44 per cent reported nationwide temperature records during the period.

The first 10 years of the 21st century registered more than 370,000 deaths linked to weather extremes, up 20 per cent from the previous decade.

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Portugal govt on the brink, markets fall

PORTUGAL'S government is tottering close to collapse after two ministers quit over its bailout reforms, sparking cries of concern from European authorities as financial markets take fright.

Stock markets and the euro fell and bond yields rose as the crisis fed fears of a new wave of instability from the eurozone's debt-laden periphery.

Alarm spread after Foreign Minister Paulo Portas resigned on Tuesday evening, a day after the shock departure of Finance Minister Vitor Gaspar.

Portuguese newspapers reported on Wednesday that the agriculture and social security ministers were also likely to quit.

The crisis came at delicate time as Prime Minister Pedro Passo Coelho tries to fulfil the terms of the 2011 bailout that rescued Portugal from financial collapse.

Passos Coelho kept up appearances on Wednesday, heading to Berlin as scheduled for a top-level meeting on youth unemployment.

But European leaders urged the premier to settle the uncertainty as observers speculated that President Anibal Cavaco Silva would call a snap election.

"The political situation should be clarified as soon as possible," said the European Commission's Portuguese president, Jose Manuel Barroso, on Wednesday.

Lisbon's key PSI 20 index of leading shares plunged 5.45 per cent in afternoon trade, with leading exchanges elsewhere in Europe sliding too.

Portuguese borrowing prices skyrocketed with the yield on benchmark 10-year Portuguese government bonds spiking above eight per cent for the first time since November 2012, before easing a little.

"The initial reaction of the markets shows the obvious risk that the financial credibility recently built up by Portugal could be jeopardised by the current political instability," said Barroso.

"If this happens it would be especially damaging for the Portuguese people, particularly as there were already preliminary signs of economic recovery," he added.

In a bid to hold together his conservative coalition, Passos Coelho on Tuesday refused to accept Portas's resignation.

But analysts warned that the political disarray could bring down his government and derail the country's recovery under the 78 billion euros ($A111.56 billion) international bailout it received in 2011.

Passos Coelho's government has just two weeks to come up with a programme to reform the state before auditors for the IMF, European Union and European Central Bank arrive on July 15.

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US auto sales accelerate in June

US auto sales accelerated in June with General Motors, Ford, Chrysler and Toyota posting strong gains as analysts forecast more growth in the months to come.

Toyota led the pack with a 14 per cent gain to 195,235 vehicles in June. Sales for the first half of the year were up six per cent at 1.1 million vehicles.

"The auto industry led the economic recovery through the first half of 2013, kicking off a strong summer selling season, which we expect will carry into the second half of the year," said Bill Fay, general manager of the Japanese automaker's Toyota division.

"Sales in June were solid, and demand didn't skip a beat."

The gains came as Toyota celebrated selling its 10 millionth Camry, which has held the crown for the top-selling car in the Unites States for the past 11 years.

Ford's sales climbed 13 per cent to 235,643 vehicles in its best June performance since 2006. Sales for the first half of the year were also up 13 per cent at 1.3 million vehicles.

"In June, we continued to see strong demand across the entire lineup," said Ken Czubay, Ford's sales chief.

"We're particularly encouraged by strong retail share gains, especially in coastal markets, where the combination of great design and fuel economy is resonating with customers -- including many buying a Ford for the first time."

Chrysler's sales rose eight per cent to 156,686 vehicles in the company's best June in six years. Sales for the first half of the year were up nine per cent at 908,332.

"The fundamentals for continued industry gains in new vehicle sales remain intact," Reid Bigland, Chrysler's sales chief, said in a statement.

GM's sales increased six per cent to 264,843 in June and were up eight per cent for the first half of the year at 1.4 million vehicles.

"We have good momentum heading into the second half of 2013: the economic outlook is solid and our launch vehicles are performing well in the marketplace," GM sales Kurt McNeil said in a statement.

Automotive website Edmunds.com forecast that total industry sales will rise 6.3 per cent in June and come in at an adjusted, annualized rate of 15.5 million vehicles once all automakers have reported.

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Reggae star stabbed himself - jury

REGGAE star Smiley Culture died from a self-inflicted stab wound to the chest during a police raid at his home, an inquest jury has found.

Surrey Coroner Richard Travers said he would make a report to the Metropolitan Police on changes or improvements to the supervision of a prisoner at their home during a search.

The 48-year-old singer, real name David Emmanuel, died from a single stab wound to the heart while police executed a search warrant at his Surrey home on March 15 2011.

The jury of five men and six women took 12 hours and 52 minutes to reach their majority verdict.

The jury foreman said: "David Victor Emmanuel took his own life. Although the tragic events of 15 March 2011 were unforeseeable, giving one officer the responsibility of supervising Mr Emmanuel and at the same time the premises search book was a contributory factor in his death."

The inquest heard that he stabbed himself after being arrested at the property in Warlingham.

The police inquiries concerned allegations of conspiring to import class A drugs into the UK, the court heard.

Smiley Culture found fame with a string of 1980s hits including CockneyTranslation, and appeared on Top of the Pops.

The inquest, which began on June 12, took place at Woking Borough Council's Civic Offices.

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Countries reject Snowden asylum bids

SEVERAL countries have rushed to reject asylum requests from fugitive US intelligence leaker Edward Snowden after he sought safe haven in 21 nations in a bid to win protection from American authorities.

Most European countries either flatly rejected the request or reacted cooly. But the leftist leaders of Venezuela and Bolivia rose to the 30-year-old's defence and said they would consider the application under the right conditions.

Snowden found particular support in Nicolas Maduro of Venezuela -- a long-term thorn in the side of the United States.

"What he did was reveal a big truth so that we could avoid a war," Maduro said during a two-day visit to Moscow for an energy summit.

"What is happening now should not be -- he never killed anyone or planted any bombs."

But Maduro refused to entertain speculation he might take Snowden on a plane with him from Moscow -- a possibility raised both by Russian media and political observers of the explosive case.

Bolivian President Evo Morales also said his country was willing to consider giving Snowden asylum.

"If there were a request, of course we would be willing to debate and consider the idea," Morales told Russia's state-run RT television in comments translated from Spanish.

Poland immediately rejected Snowden's petitions while an Indian foreign ministry spokesman said there was "no reason to accede to the request."

The Netherlands also said no while Brazil said it was "not going to respond."

And a spokesman for Russian President Vladimir Putin said Snowden himself had decided to scrap his petition with Moscow -- where he has been stranded in an airport transit zone since June 23 -- after the Kremlin chief said he wanted him to stop releasing damaging allegations about the United States.

"He abandoned his intention and his request to receive the chance of staying in Russia," Putin's spokesman Dmitry Peskov told reporters.

The WikiLeaks anti-secrecy website -- its associate Sarah Harrison travelling with the former National Security Agency contractor -- said he had sent out applications to 13 European countries as well as six Latin American nations along with China and India.

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Person dead after crash near Rockhampton

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Last Updated: July 03, 2013

A PERSON has died in a single vehicle crash near Rockhampton.

The forensic crash unit is investigating the incident, which occurred at an intersection in Sandringham shortly before 11pm (AEST) on Tuesday.

No further information was available.

Carr set to drive manufacturing revival

VICTORIAN Senator Kim Carr wants to bring together "white coat and blue collar" to create high-skilled jobs in the struggling manufacturing sector.

Dogs given rough end of the stick

STICKS - dogs love chasing and fetching them. But the Australian Veterinary Association has sensationally called for a halt to this act... for the good of the dog.

PM pressured for boat solution

NEW Prime Minister Kevin Rudd is under pressure to announce a tougher asylum seeker policy ahead of a visit to Indonesia tomorrow.

Workers blow dough on food

BOUGHT lunches, transport and other work costs are gobbling more than a third of the average full-time employee's pay, a study says.

Watson ton as new openers hit it off

UPDATE: A REVITALISED Shane Watson has blazed a century before lunch against Worcester as Australia's new opening partnership worked a treat.

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Six children dead in Indon mosque collapse

SIX children have been killed and 14 others trapped after a mosque in Indonesia collapsed on Tuesday during a Koran reading session when a powerful earthquake struck, an official says.

"Six children were found dead under the rubble of a mosque flattened by the quake," the head of the disaster management agency in central Aceh district, Subhan Sahara, told AFP.

"Our search and rescue are struggling to evacuate an estimated 14 children still trapped under the rubble.

"I hope they can be found alive but the chances are very slim."

The six deaths take the confirmed toll from the 6.1-magnitude quake in Aceh province, on Sumatra island, to 11.

Dozens more have been injured by the quake which struck at a shallow depth of just 10 kilometres and also caused many houses to collapse.

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Snowden can stay in Russia: Putin

US whistleblower Edward Snowden may have asylum in Russia as long as he stops releasing information about US intelligence programs, Russian President Vladimir Putin says.

"Russia never hands over anybody anywhere and has no intention to do so," Putin told a news conference in Moscow.

"If he (Snowden) wants to remain here there is one condition - he should stop his work aimed at inflicting damage on our American partners no matter how strange this may sound coming from me."

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Man hit by car dies in Melbourne hospital

A 28-YEAR-OLD man has died after getting into an argument in north Melbourne before being knocked over by a car.

Police believed the two men involved in the argument knew each other, and that events escalated when one drove into the other with his car.

The 28-year-old man was taken to the Royal Melbourne Hospital, where he later died from his injuries.

The 47-year-old driver is being questioned by police.

A report is being prepared for the coroner.

AAP tjm/

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Citigroup to pay $US968m to Fannie Mae

CITIGROUP has agreed to pay $US968 million ($A1.07 billion) to Fannie Mae to resolve potential future repurchase claims on residential mortgage loans originated between 2000 and 2012.

A sizable group of the loans were originated during the US housing boom. Mortgage giants Fannie Mae and Freddie Mac bought mortgage loans from banks like Citigroup in the run-up to the financial crisis. Fannie and Freddie teetered as the loans went bad, and they were effectively nationalised in 2008. The government has spent billions to keep Fannie and Freddie afloat.

Fannie and Freddie have since said that the banks misled them by not telling them the true condition of the mortgages they were buying. For several years, they have been demanding that the banks repurchase the mortgages.

The agreement between Citigroup and Fannie Mae covers claims for breaches of representations and warranties on 3.7 million loans. The deal doesn't release Citigroup's liability for servicing and other ongoing contractual obligations for the loans.

Citigroup said that it is also still liable for a group of less than 12,000 loans originated between 2000 and 2012, including loans sold with a performance guarantee or under special credit enhancement programs.

The bank anticipates a $US245 million residential mortgage reserve for its second quarter, consistent with reserves from recent quarters. Citigroup will report its quarterly results on July 15.

The New York company said it has adequate reserves for loans not covered by the agreement.

Citigroup's stock added $US1.05, or 2.2 per cent, to $US49.02 in morning trading. The shares have traded in a 52-week range of $US24.91 to $US53.56.

In January, Bank of America reached an $US11.6 billion settlement with Fannie Mae to settle claims resulting from mortgage-backed investments that soured during the housing crash.

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PM asked to consider low income earners

LABOR is being urged to reconsider low income earners this week.

Prime Minister Kevin Rudd has two days of meetings ahead to lay the groundwork for his government before heading to Indonesia for talks on asylum seekers, security and trade with President Susilo Bambang Yudhoyono.

Mr Rudd says he has "fresh policy ideas" but would not flag them until they go through cabinet.

One idea he is being urged to consider on Twitter is raising the Newstart allowance, after an ABC Four Corners program highlighted the struggle to live on $35 a day.

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Falling $A makes RBA rate cut unlikely

THE Reserve Bank of Australia is unlikely to cut interest rates on Tuesday as the falling Australian dollar does the central bank's heavy lifting.

All but one of 13 economists surveyed by AAP are forecasting the cash rate to remain at its record low of 2.75 per cent.

The RBA last cut the cash rate in May, when the Australian dollar was still above parity with the greenback.

At the time the RBA said low inflation had allowed it to make the reduction, and cited the high Australian dollar as one of the reasons why conditions remained tough for business.

But the Australian dollar has since lost more than 10 US cents.

It has hovered between 91 and 93 US cents since US Federal Reserve chairman Ben Bernanke last month signalled a possible wind-back of the US central bank's economic stimulus measures.

CommSec economist Savanth Sebastian said the RBA would likely leave the cash rate on hold, and wait until June quarter inflation figures were released on July 24 before a likely rate cut in August.

The pull-back in mining investment is occurring faster than expected and non-mining sectors need to be inspired to invest and fill the spare capacity in the economy, he said.

"I think, certainly, the reserve bank would want to see further improvement in terms of stimulatory measures and I think another rate cut in August may just do that for them," Mr Sebastian said.

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