MRRT should be scrapped: coalition

New calculations on the mining tax say it will raise $5 billion less than the government predicted. Source: AAP

A COALITION-LED parliamentary committee recommends the mining tax be scrapped and blames Prime Minister Julia Gillard and Treasurer Wayne Swan for the poor design of the impost.

But a dissenting report from Labor senators says the inquiry into the first six months' operation of the minerals resource rent tax (MRRT) was done in haste and the final report read like a submission from the Minerals Council of Australia (MCA).

The Senate Economics References Committee released on Monday its report on the development and operation of the MRRT, with four coalition members out of nine slamming the government for the tax.

"The overwhelming evidence received by this inquiry confirms that the prime minister and the treasurer have only got themselves to blame for the mining tax fiasco in general and the massive budget black hole from the MRRT in particular," committee chair and Liberal senator David Bushby said.

Senator Bushby said the committee's considered view was Labor knew it had overestimated revenue from the tax and underestimated the impact of concessions during negotiations with big miners BHP Billiton, Rio Tinto and Xstrata in 2010.

The design of the MRRT was mainly to blame for the huge revenue shortfall against the estimates of Treasury, he added.

The Parliamentary Budget Office on Monday projected the MRRT would raise $800 million in 2012/13 - less than half the $2 billion forecast by Treasury and after the impost produced just $126 million in its first six months.

"The committee remains strongly of the view that the MRRT is beyond repair and should be scrapped," Senator Bushby said.

Deputy chair Mark Bishop said the majority report was an intensely political document and it did not reflect the facts presented to the committee.

"The majority report was designed in haste, drafted in isolation, inconsistent with the evidence, flawed in approach and unhelpful to any serious players in the mining industry," the West Australian Liberal senator said.

NSW Labor senator Doug Cameron said the coalition senators had accepted with little scrutiny the submissions of the Minerals Council and mining companies.

The Australian Greens in their dissenting report called for the government to raise the tax rate to 40 per cent, from 30 per cent, plug loopholes and expand it to all minerals, rather than just iron ore and coal.

If that was done, the PBO estimates the tax would raise $26.2 billion between 2013/14 and 2016/17.

The softer forecast puts another dent in Mr Swan's revenues, which are already under pressure from the high Australian dollar and lower company tax takings, ahead of the May 14 budget.

"The treasurer will update all forecasts on budget night in the usual way," Mr Swan's spokeswoman told AAP.

Minerals Council of Australia chief Mitch Hooke wasn't surprised by the PBO estimates because of the impact of the high dollar and lower commodity prices.

"As for the Greens' position, well I'm getting a bit jack of this," he told ABC radio.

"You can't get tax out of profits if the profits aren't there."

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Labor support below 30%: poll

LABOR support has slumped to under 30 per cent with the coalition holding an election-wining lead, a new poll says.

The Seven News/ReachTEL poll of 2,856 voters on May 3 found Labor primary support at 29.3 per cent, down two per cent from the most recent ReachTEL poll on April 12.

Coalition support was 45.2 per cent, down almost one per cent.

Nationals support was also down slightly to 3.3 per cent while Greens support was steady at 10.2 per cent. The Katter Australian Party attracted 3.2 per cent, up 0.4 per cent.

On a two-part preferred basis, the coalition remains in an election winning 58-42 lead.

The poll shows dwindling support for Julia Gillard as preferred PM - 40.6 per cent, down from 43.5 per cent - and improving support for Tony Abbott - 59.4 per cent, up from 56.5 per cent.

The results are broadly in line with the most recent Newspoll which places Labor primary support at 32 per cent and the coalition 46 per cent.

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Tabcorp, Tatts say pokies levy too much

Tatts Group says the Victorian government is charging them on poker machines they no longer operate. Source: AAP

GAMBLING firms Tatts Group and Tabcorp say the Victorian government is charging them an exorbitant levy on poker machines that they no longer operate.

Tatts said on Monday that it had received a letter from the Victorian Treasurer advising it that it must pay a health benefit levy of $42.6 million in respect of gaming operations conducted by Tatts in Victoria over the 2012/13 financial year.

Tabcorp has received a letter asking for $42.0 million. However, the racing industry will be charged 25 per cent of that because Tabcorp operated its gaming machines as a joint venture with the racing industry.

The health benefit levy was introduced by the Victorian government in July 2000 and applied to poker machines operated in Victoria, to help fund hospitals and charities.

But both Tatts and Tabcorp lost their duopoly to operate poker machines operated outside of Melbourne's Crown casino, on August 15, 2012.

Tatts and Tabcorp said that as a result of the expiry of their Victorian gaming operator's licence on August 15, their gaming operations in Victoria were limited to 46 days.

During this period, Tatts' gaming operations under the licence generated earnings before interest, tax and depreciation of about $29 million - much less than the amount of the levy sought by the Victorian government.

"Tatts strongly disputes the reasonableness of the determination made by the Treasurer and its legal sustainability," Tatts said in a statement on Monday.

The company said it would also rely on an indemnity granted by Victoria in 2009 in consideration of Tatts consenting to an extension of its licence (from April 14, 2012 to August 15, 2012).

"Tatts would like to think that a dialogue with the Victorian government will result in a common sense outcome in relation to this matter, however in the absence of this will take all steps necessary to protect its legal position," Tatts said.

Tabcorp said on Monday the amount that it had ben asked for was contrary to its expectations.

The company said the Victorian government's 2012/13 budget papers had included an amount in line with a pro rata calculation referable to 46 days of poker machine operations.

"The levy has not been applied pro rata and it does not reflect that Tabcorp ceased to operate gaming machines on August 15, 2012 when its gaming licence expired," Tabcorp said.

"Tabcorp is considering whether to commence legal proceedings to ensure the levy is applied on a pro rata basis."

A spokesperson for Victorian Treasurer Michael O'Brien was not immediately available for comment.

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Challenge to Aust plain package tobacco

CUBA has become the latest country to launch a legal attack on Australia's landmark plain packaging rules for tobacco at the World Trade Organisation, the global body says.

The WTO said that Cuba had requested consultations with Australia on law requiring tobacco products to be sold in identical, olive-brown boxes bearing the same typeface and health warnings with graphic images of diseased smokers.

Under the 159-nation WTO's rules, requesting consultations is the first step in an often complex trade dispute settlement process which can last for several years.

Given that the legislation covers all tobacco products, not just cigarettes, it has already been challenged at the WTO by Cuba's fellow cigar-producing nations Honduras and the Dominican Republic.

In addition, Ukraine has filed a suit at the Geneva-based body, which oversees its member nations' respect for the rules of global commerce.

All the plaintiff countries maintain that Australia's packaging law breaches international trade rules and intellectual property rights.

In the event that the WTO's disputes settlement body finds in their favour, it would have the power to authorise retaliatory trade measures against Australia if the country failed to fall into line.

The dispute with Australia marks the first-ever challenge by Cuba against a fellow member since it joined the global body in April 1995, four months after the WTO was founded in its current form.

Australia's pioneering legislation - passed in 2011 and brought into force last December - has won wide praise from health organisations which are trying to curb smoking.

The Australian government has faced a string of court challenges from tobacco firms.

Besides trade and intellectual property concerns, tobacco companies say there is no proof that plain packaging reduces smoking and have warned that the law sets a precedent that could spread to products such as alcohol.

New Zealand has announced plans to bring in its own plain packaging law this year, making it only the second country in the world to do so.

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N Korea holds firm on jailed American

North Korea says jailed American Kenneth Bae won't be used as a 'bargaining chip'. Source: AAP

NORTH Korea said it won't invite any leading US figure to seek the release of a jailed American and he would not become a "bargaining chip" in any political negotiations.

"Some media of the US said that the DPRK (North Korea) tried to use Pae's case as a political bargaining chip. This is a ridiculous and wrong guess," a foreign ministry spokesman told the official KCNA news agency.

"The DPRK has no plan to invite anyone of the US as regards Pae's issue."

The North said it had sentenced Pae, known in the US as Kenneth Bae, to 15 years' hard labour for "hostile acts" aimed at toppling the communist regime at a trial on April 30.

The Korean-American tour operator was arrested in November as he entered the northeastern port city of Rason.

Several Americans have been held in the North in recent years, and been freed after visits by high-profile Americans such as former presidents Jimmy Carter and Bill Clinton.

In 2010 Carter negotiated the release of US citizen Aijalon Mahli Gomes, who was sentenced to eight years' hard labour for illegally entering the country.

In 2009 Clinton managed to free US television journalists Laura Ling and Euna Lee, also jailed for an illegal border crossing.

The ministry spokesman said Pyongyang had showed "generosity... from the humanitarian point of view" in the past, but the latest case proved that such generosity will "be in no use in ending Americans' illegal acts".

"As long as the US hostile policy goes on, American's illegal acts should be countered with strict legal sanctions. This is a conclusion drawn by the DPRK."

The latest development comes amid high military tension on the peninsula.

Pyongyang, angered by new UN sanctions for its third nuclear test in February and by US-South Korean joint military drills, has issued blistering threats of missile and nuclear attacks targeting the South and the United States.

The United States has called for the immediate release of Bae, whose alleged offence is unclear.

Seoul-based activist Do Hee-Yoon has told AFP he suspected Bae was arrested because he had taken photographs of emaciated children in North Korea as part of efforts to appeal for more outside aid.

The North's spokesman said Sunday that Bae's belongings confirmed the crime for which he was convicted but did not elaborate.

"He entered the DPRK with a disguised identity in an intentional way under the back-stage manipulation of the forces hostile toward the DPRK," the spokesman said, adding he had made a confession.

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Israeli warplanes strike Syria

Israel has launched air strikes in Syria at a shipment of Iranian-made guided missiles. Source: AAP

ISRAELI warplanes have struck areas in and around the Syrian capital, setting off a series of explosions as they targeted a shipment of highly accurate, Iranian-made guided missiles believed to be on their way to Lebanon's Hezbollah militant group, officials and activists say.

The attack, the second in three days, signalled a sharp escalation of Israel's involvement in Syria's bloody civil war. Syria's state media reported that Israeli missiles struck a military and scientific research centre near the Syrian capital and caused casualties.

An intelligence official in the Middle East, who spoke on condition of anonymity, confirmed that Israel launched an airstrike in Damascus early on Sunday but did not give more precise details about the location.

The target was Fateh-110 missiles, which have very precise guidance systems with better aim than anything Hezbollah has in its arsenal, the official told The Associated Press.

The airstrikes came as Washington considers how to respond to indications that the Syrian regime may have used chemical weapons in its civil war.

President Barack Obama has described the use of such weapons as a "red line", and the administration is weighing its options - including possible military action.

Israel has said it wants to stay out of the brutal Syrian war, but Prime Minister Benjamin Netanyahu has repeatedly stated he would be prepared to take military action to prevent sophisticated weapons flowing from Syria to Hezbollah or other extremist groups.

Israel and Hezbollah fought a month-long war in mid-2006 that ended in a stalemate.

Syria's state news agency SANA reported that explosions went off at the Jamraya military and scientific research centre near Damascus and said "initial reports point to these explosions being a result of Israeli missiles".

SANA said there were casualties but did not give a number.

The Britain-based Syrian Observatory for Human Rights, an activist group, reported large explosions in the area of Jamraya, a military and scientific research facility northwest of Damascus, about 15km from the Lebanese border.

Hezbollah's al-Manar TV said the research centre in Jamraya was not hit. It added that an army supply centre was the target of the strike.

Al-Manar quoted unnamed Syrian security officials as saying that three sites, including military barracks, arms depots and an air defence centre had been targeted by the strike.

Uzi Rubin, a missile expert and former defence ministry official, told the AP that if the target were Fateh-110 missiles as reported, then it was a game changer as they put almost all Israel in range and could accurately hit targets.

Rubin emphasised that he was speaking as a rocket expert and had no details on reported strikes.

He said the rockets were much five times more accurate than the Scud missiles that Hezbollah has fired in the past.

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Majority back disability levy - and Abbott

A new poll shows a majority are happy to pay a levy for the disability insurance scheme. Source: AAP

MORE than 50 per cent of Australians support increasing the Medicare levy to pay for the government's disability care reforms.

But in a blow to Prime Minister Julia Gillard, a Seven News/ReachTEL poll has found about 41 per cent are less likely to vote Labor because of the announcement.

A day after Victoria became the fourth state to sign up to the scheme, Ms Gillard said her government would "keep working hard" to make DisabilityCare Australia truly national.

"I think the momentum is with us now to get this as the national scheme and I'll keep talking to the premiers of Queensland and Western Australia, and of course the chief minister in the Northern Territory ... to try and get agreement around the nation," Ms Gillard told ABC television.

The Seven News poll released on Sunday night revealed 52.5 per cent backed increasing the levy by half a percentage point, with 33.5 per cent opposed and 14 per cent undecided.

Of the 2856 people polled, 26.4 said the announcement made them more likely to vote Labor, while 41.2 said it would make them less likely to back the government.

And despite her key role in pushing through the reforms, only 42.7 per cent said they trusted Ms Gillard to best deliver the disability scheme.

Opposition Leader Tony Abbott had the trust of 57.3 per cent.

Ms Gillard last week announced an increase in the Medicare levy to two per cent, to raise $3.2 billion of the $8 billion needed each year for the reforms.

On Sunday she said the levy increase should be permanent, and not scrapped when the budget returned to surplus.

"I think this needs to be there as a funding source for all of time," she told ABC television.

"I think it is fair to say to Australians that you will be asked for a little bit more in order to fund something that we all benefit from."

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Vic budget boost for Frankston train line

Victorian Premier Denis Napthine will announce a cash injection for the Frankston train line. Source: AAP

THE Victorian government has announced a $100 million boost to Melbourne's busiest rail services while warning the upcoming state budget will be a tough one.

Premier Denis Napthine announced the cash injection for the southeastern Frankston line, which carries about 60,000 people every weekday, as part of Tuesday's 2013-14 state budget.

He said the government was building for growth despite falling GST revenues from the federal government.

"We are managing the budget in difficult, challenging times, in times where we have a reduction in GST revenues," he told reporters.

"But at the same time doing it in a responsible, economic manner and that's what you'll see in the budget on Tuesday."

The extra money announced on Sunday would pay for track, signalling and power upgrades and allow the line to accommodate the newer X'Trapolis trains, Dr Napthine said.

He brushed off suggestions the boost was aimed at politically important seats on the line.

"Investing $100 million in the Frankston line will certainly show we care about people along the Frankston line," he said.

"Everybody who uses the metro rail system is important to us as a government."

Poor service on the Frankston line was a key issue in the 2010 election, with a swathe of seats along the line, including Bentleigh, Mordialloc and Carrum, switching from Labor to the coalition.

Dr Napthine also announced a funding injection of $224 million for disability support in the budget, which will take annual disability funding to $1.6 billion.

The funding provides $107 million for 720 new Individual Support Packages for people with high support needs, which will be partly funded by increased lodging fees for government-run disability accommodation.

The announcement comes after Victoria became the fourth state to sign up to the national disability care scheme on Saturday, agreeing to a statewide disability care program by the end of the decade.

The state government also announced budget funding on Sunday to buy land for a new primary school in Melbourne's south.

Education Minister Martin Dixon said the Ferrars Street school in South Melbourne would cater to the area's fast-growing population.

A spokesman for Mr Dixon said the government had not released the funding amount as negotiations were continuing over the sale.

The money comes on top of $11.5 million announced on Saturday for the first stage of a high school in Melbourne's outer north.

Last week the government announced three new schools would be built in growth areas in the city's west.

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Chinese boat damages Philippine reef

A CHINESE fishing vessel that crashed into one of the Philippines' most famous reefs damaged almost 4,000 square metres of centuries-old coral.

Some 3,902 square metres of coral was destroyed after the boat became stranded in the Tubbataha marine park - a UNESCO World Heritage-listed coral reef - the park management said on Saturday.

"The damage the Chinese vessel caused to the reef is heart-breaking," Angelique Songco, the head of the marine park, said in a statement after experts assessed the affected area.

Some of the coral destroyed by the Chinese vessel was 500 years old, Songco said, adding the damage was much larger than the area destroyed when a US Navy minesweeper, the USS Guardian, got stranded on Tubbataha in January.

The 48-metre vessel, carrying 12 suspected Chinese fishermen, ploughed into the Tubbataha Reef near the western island of Palawan on April 8.

Authorities later found hundreds of dead pangolins, an internationally-protected species, hidden inside the vessel.

Tubbataha marine park information officer Glenda Simon told AFP the 12 Chinese would likely be fined about 95 million pesos ($A2.27 million) just for trespassing into the marine park and destroying the coral.

The government has already charged them with poaching and they could face an additional 12 to 20 years in jail for possession of the pangolins in violation of wildlife law.

Pangolins are widely hunted in parts of Asia for their meat, skin and scales and in China they are considered a delicacy and to have medicinal qualities.

The Philippine office of the World Wide Fund for Nature condemned the poaching of the pangolins after the men were caught, saying that growing demand in China was wiping the animal out in Southeast Asia.

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Israel silent on reports it bombed Syria

ISRAEL has carried out new air strikes on Syria, targeting a weapons shipment to Lebanese militant group Hezbollah, according to US officials cited by the media, but the Jewish state has been silent on the claims.

CNN television said US and Western intelligence agencies were reviewing information suggesting Israel conducted a strike overnight between Thursday and Friday.

Lebanon's army said pairs of Israeli airplanes entered Lebanese airspace on three occasions overnight between Thursday and Friday.

The first two entered over the souther city of Sidon at 7:10pm, followed three hours later by a second pair that entered over Jounieh, north of Beirut, a statement said.

The last pair flew in over the capital, the statement said, adding that the planes stayed in Lebanese airspace for two to three hours at a time.

CNN reported that the United States does not believe Israeli warplanes entered Syrian airspace to conduct the strikes.

A senior US official told NBC News that the airstrikes were likely tied to delivery systems for chemical weapons.

White House and Pentagon officials declined to comment on the reports.

But Republican Senator Lindsey Graham of South Carolina, who serves on the Senate Armed Services Committee, was quoted as telling an audience that Israel had indeed bombed Syria.

"Israel bombed Syria tonight," Graham was cited by the Politico news website as saying in passing, without offering any further details.

Israel was tightlipped on the claims, with the army declining on Saturday to comment and a defence official saying only that the Jewish state was monitoring any possible transfer of chemical weapons.

Israel is "following the situation in Syria and Lebanon, with an emphasis on transferring chemical weapons and special arms," the official told AFP.

If confirmed, this would mark the second time Israel has hit Syria this year.

Earlier this month, the Jewish state implicitly admitted carrying out a January air strike on a weapons convoy in Syria thought to be en route to Hezbollah - a long-time Damascus ally.

The reports on the latest strike came shortly after President Barack Obama nearly ruled out deploying US troops to Syria, saying he did not foresee a scenario in which that would be beneficial to the United States or Syria.

Speculation has mounted that the Obama administration could reverse its opposition to arming the rebels after the White House said last week that President Bashar al-Assad likely used chemical weapons on his people.

Obama has been reluctant to intervene in the war but faces mounting criticism that he has allowed the Assad regime to cross his own declared "red line" on using chemical weapons.

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