PNG warns Rudd, Abbott over asylum issue

PAPUA New Guinea has warned Labor and the coalition not to impugn its dignity over the asylum seeker issue, as 70 men were flown out of the Manus Island detention facility amid allegations of rape and torture.

Immigration Minister Tony Burke is due on the island on Thursday to see for himself conditions at the centre, after speaking with the whistleblower who made the claims.

It's not clear if the group which left on Wednesday included the alleged offenders.

But Mr Burke had said he would remove them before Australian authorities begin transferring people to the island under Labor's new hardline policy to stop the flow of asylum seeker boats.

Whistleblower Rod St George alleges up to half a dozen men were assaulted and sexually abused by some detainees, others were forced to sew their lips together and one had solvent poured into his ear.

"I've worked with some of the worst criminals Australia has and even they have a clearer sense of decency than what I witnessed there," Mr St George told SBS's Dateline program.

Under the federal government's deal with PNG, people arriving by boat will be denied resettlement in Australia, be taken to Manus Island for processing and if their refugee status is approved, resettled in PNG.

Prime Minister Kevin Rudd said he made no apology for the government's tough stance, after reports three people, including a child, died after a boat carrying more than 160 people sank off Cidaun in western Java at about 2am (AEST) on Wednesday.

Indonesia's rescue agency BASARNAS told AAP there were about 157 survivors.

"We are seeing too many drownings, we are seeing too many sinkings, too many innocent people being lost at sea," Mr Rudd told reporters in Melbourne.

Opposition Leader Tony Abbott pointed to Mr Rudd's record, saying it was his government in 2008 that dismantled the Howard government policies which had "worked" to stop the boats earlier in the decade.

"This is a tragic reminder of what happens when policy change in Australia puts the people smugglers back in business," Mr Abbott told reporters on the Gold Coast.

"The only way, I submit, to stop the boats is to change the government."

Mr Rudd again rejected Mr Abbott's claim the deal with PNG, under which Australia has agreed to provide further aid, was a "cash splash" that wouldn't be accountable to taxpayers.

"Partisan politics aimed to, frankly, derail the regional resettlement agreement is just an appalling approach to the responsibilities of the highest office of this land," Mr Rudd said.

PNG High Commissioner Charles Lepani issued a warning to "Australian politicians to observe international protocols and courtesies ... and not impugn the dignity of our leaders, who are attempting to assist Australia in this very complex regional and international issue of asylum seekers."

Mr Abbott on Tuesday said PNG Prime Minister Peter O'Neill made it "pretty clear" the government had "subcontracted out to PNG the management of our aid program".

Opposition foreign affairs spokeswoman Julie Bishop added Mr O'Neill "has claimed and certainly believes that Kevin Rudd has agreed to hand over total control of the entire PNG aid budget".

In Port Moresby, Mr O'Neill told reporters the resettlement deal was an expansion of the existing aid program.

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Spike in violence tests Thai peace efforts

A SPATE of bomb and gun attacks in southern Thailand has left eight people dead, including teachers and police officers, officials say, despite a tentative deal to curb violence.

Malaysia - which is facilitating peace talks between the Thai government and Muslim rebels from the region - announced on July 12 that the two sides had agreed to try to avoid bloodshed during Ramadan.

But after a period of relative calm, violence spiked on Tuesday with the deaths of six people, including two police officers visiting a local market to gather intelligence in Narathiwat Province, according to the Thai authorities.

The other victims were a couple in their early 50s shot and killed while driving home and two Muslim villagers who died after gunmen sprayed bullets at a tea shop.

And on Wednesday, two female teachers were killed in a roadside bomb blast, while a third was seriously wounded, police said.

An insurgency in the Muslim-dominated region has claimed more than 5,700 lives since 2004 but talks between the Thai authorities and some rebel groups including the Barisan Revolusi Nasional (BRN) have brought tentative hopes of peace.

Thailand's National Security Council chief and lead peace negotiator Paradorn Pattanatabut said dialogue with the BRN would continue.

He said insurgent attacks were still down sharply compared with last year's Ramadan.

"I can reassure you that the talks haven't failed," Paradorn told reporters.

"Whenever violence occurred we asked the BRN and they said through the facilitator that it was the work of small, uncontrollable groups who oppose the peace dialogue," he said.

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$A steady after a volatile day

THE Australian dollar hit a one month high after the release of lower than expected local inflation figures, but later fell on the release of weak Chinese manufacturing figures.

At 1700 AEST on Wednesday, the local unit was trading at 92.57 US cents, slightly down from 92.59 cents on Tuesday.

Just after 1130 AEST the Australian dollar peaked at 93.19 US cents, its highest level since June 27.

The consumer price index rose 0.4 per cent in the June quarter, and 2.4 per cent in the year to June, slightly below expectations.

Soon after those figures were published by the Australian Bureau of Statistics, HSBC released its measure of manufacturing activity in China, which fell to an 11-month low in July.

The data made for a volatile session for the Australian dollar, Forex.com research analyst Chris Tedder said.

"Today's inflation data isn't a game changer in our opinion, but it makes predicting whether the Reserve Bank of Australia will cut interest rates next month more complicated," he said.

"A significantly weaker second quarter inflation figure would have almost certainty caused the RBA to become more dovish, while a significantly stronger figure would have made a rate cut unlikely."

The futures market is now pricing in a 62 per cent chance of a quarter of a percentage point cut at the RBA August board meeting.

The market had been pricing in a 67 per cent chance on Tuesday.

At 1700 AEST, the Australian dollar was at 92.39 Japanese yen, up from Tuesday's close of 92.10 yen, and at 70.03 euro cents, down from 70.23 euro cents.

Meanwhile, the Australian bond market ended the local session weaker.

Bond prices fell on the inflation numbers but then had a small rally after the Chinese manufacturing data, ANZ head of interest rate research Tony Morriss said.

"Overall, we think the inflation numbers were a little disappointing for the RBA, who might have looked for slightly lower CPI," he said.

"There is going to be some upward pressure on tradable prices in the future because of the falling Australian dollar."

At 1630 AEST, the September 10-year bond futures contract was trading at 96.310 (implying a yield of 3.690 per cent), down from 96.340 (3.660 per cent) on Tuesday.

The September three-year bond futures contract was at 97.340 (2.660 per cent), down from 97.370 (2.630 per cent).

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Witness claims actress set fire to pants

Amanda Bynes has been placed on a mental health hold after allegedly starting a fire at her US home. Source: AAP

AMANDA Bynes reportedly set fire to her trousers and may have been in danger of harming herself, before she was placed taken in for a psychiatric examination.

The troubled actress was hospitalised on Monday night for a mental health evaluation after deputies said she started a small fire in the driveway of a home in Southern California.

There are reports the incident was more serious than initially thought as gasoline was involved and it's now been claimed the 27-year-old star was in danger of harming herself.

"I see this girl with her pant leg on fire and a gas can trailing fire through the driveway," eyewitness Andrew Liverpool told E! News.

"She was laying down right here trying to roll or do something to take off the fire from her pants. Her pants were on fire."

Liverpool was coming home from work about 8.45pm local time when he came across Bynes. He immediately stopped to help her and realised it was the star as she had on her trademark wig.

"I quickly pull over to go help her and when I got over here. She put the fire out on her leg and was rushing over to her dog," he recalled.

"I kicked the gas can over and moved it to the middle of the driveway so nothing else would catch on fire. And I said, 'Are you OK?' She was kind of frantic and discombobulated, and many people rushed over to try to assess the situation and when I looked back up, she was gone."

Another onlooker summoned help and Liverpool went to look for Bynes - who had run off wearing her "charred pants". He found her a block away, where she was making a phone call and attempting to get a taxi.

"I told the driver, 'Don't let her in. There's a fire'," he explained. "I tried stopping her and she was like, 'Please don't touch me, don't move.' [Then] she got in and [the driver] just took off. Squad cars chased after her and I don't know what happened next."

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430 Qld govt IT jobs earmarked to go

ABOUT 430 Queensland government IT jobs could go next financial year and the minister won't guarantee work will stay onshore.

The state government is divesting its technology services provider, Centre for Information Technology and Communications (CITEC), within two years as part of a cost cutting drive.

The government's Information Communications Technology deputy director-general, Andrew Spina, told a budget estimates hearing on Tuesday job losses were expected to be finalised after a review was handed down in two months time.

"If you look at the service delivery statement, we've identified a reduction of staff for next financial year, which represents a movement of corporate resources and a movement of resources from the chief technology office to a number of 430," he said.

"Depending on what the outcomes of that review are, we would obviously be considering what other options there would be and what would need to occur with staff overall."

Information Technology Minister Tim Mander said he expects the government's IT needs to increase over the coming years but more of this work will be done by the private sector.

"This is good news for people in the IT game, the government isn't going to shut up and stop using IT," he said.

However when pressed by the opposition, Mr Mander couldn't promise jobs wouldn't be outsourced overseas.

"The key things for me will be value for money for Queenslanders and support of our local industry," he said.

Former Federal Treasurer Peter Costello's audit of the state's finances recommends the government divest itself of CITEC.

His report said CITEC was due to record an operating deficit of around $26.4 million in 2011-12, with further deficits expected in the following years.

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Abuse victim brings inquiry to tears

A WITNESS has drawn tears from the public gallery and applause from the commissioner of a special inquiry as he told his story of abuse at the hands of a NSW Catholic priest.

The man, now 37, flew to Newcastle from interstate to tell how abuse at the hands of Father James Fletcher had contributed to his alcohol use, relationship breakdowns, depression, business failure and a suicide attempt.

He questioned how different his life would have turned out if the church "had done something about Fletcher years ago instead of moving him around. Would he have got to me?'"

He said Fr Fletcher did "a terrible job on me."

"I had tried to block it out but there were many times I was tormented by memories and the shame, anger and embarrassment which had a really bad effect on me," he told the inquiry into the police handling of child sexual abuse allegations involving Hunter Valley priests, Fr Denis McAlinden and Fr Fletcher.

"The breach of trust I have experienced at the hands of the Catholic church will affect me forever as I was an innocent little kid with a big hope for the future...I expected that when I finally got the courage to tell someone about it the church would not let me down...

"That wasn't to be and I believe they put more effort into damage control than into caring for me."

After he gave his evidence, commissioner Margaret Cunneen applauded his courage.

"You must always remember, no shame attaches to you," she told him.

Fr Fletcher was convicted in a NSW district court in 2005 of sexually assaulting a boy and died in jail in 2006.

Later in the day, a senior Hunter Valley Catholic priest denied there was "a culture" of not recording details of pedophile priests in the 1990s.

Monsignor Allan Hart told the inquiry he believed it was sufficient to verbally pass information on to the bishop of the Maitland/Newcastle diocese at the time, Leo Clarke.

Monsignor Hart, who was second in charge of the diocese, admitted notes were never taken during meetings and conversations between 1993 and 1995 with two victims, a nun and bishop Clarke.

"These conversations raised matters of the gravest nature involving a priest where you did not take notes, was there a culture within the office to avoid there being a record?" barrister Maria Gerace, on behalf of a female victim of Fr McAlinden, asked.

"I passed the information on to the bishop, he got my record," Monsignor Hart answered.

He said there was no policy to record these meetings.

Fr McAlinden died in Western Australia in 2005.

Documents obtained by the commission show church leaders knew from the 1970s Fr McAlinden had sexually abused Hunter Valley children since the 1950s.

In 1993, Bishop Clarke stripped him of his powers to act as a priest but until the end of 1997 he was living a "nomad" type of life, paid an allowance by the Maitland/Newcastle diocese and sometimes operating as a priest in various parts of the world.

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Spain still stuck in recession

THE crisis hit Spanish economy remained in recession in the second quarter but seemed close to a recovery thanks to exports, the Bank of Spain says.

"According to available data, that is still incomplete, we estimate GDP (gross domestic product) fell by 0.1 per cent on a quarterly basis, a yearly drop of 1.8 per cent," the central bank said in a statement on Tuesday.

But the Bank said the contraction had slowed considerably, eased by a boost in demand for Spanish exports which had made a 0.4-per cent contribution to the country's gross domestic product during the quarter.

Spain, the eurozone's fourth-biggest economy, has been sunk in recession since mid-2011 and officially contracted by another 0.5 per cent in the first quarter this year.

But the Spanish government has repeatedly signalled in the past month that the economy is about to get back on track on the wave of resurging exports.

Last week, the government said Spain's trade deficit narrowed sharply in May.

Exports have been a rare bright spot for the Spanish economy which is struggling to recover from a 2008 property crash that has pushed the jobless rate up to a record 27 per cent.

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Pair deny SA throat slit murder

Two SA men have gone on trial for murdering a man whose throat was slit and was stabbed 25 times. Source: AAP

A STRIKING-LOOKING man with long blond hair was repeatedly stabbed and had his throat cut after making a sexually suggestive remark, a jury has been told.

Memories differed about the actual comment, but prosecutor Sandi McDonald SC said one witness recalled the victim telling Michael Joseph Lindsay something like: "I will pay you for sex".

Another witness understood the comment to be jocular and to be directed at the whole group, she said.

Ms McDonald was opening the crown case at the South Australian Supreme Court trial of Lindsay, 29, and Luke James Hutchings, 30.

They have pleaded not guilty to murdering Andrew Negre, 37, whose dumped body was found in a reserve at Hallett Cove, in Adelaide, on April 8, 2011 about a week after he died.

Ms McDonald alleged that after Mr Negre's sexual comment, Lindsay punched him to the ground and Hutchings held his legs as Lindsay went through his pockets and took money.

Lindsay stabbed Mr Negre at least 25 times before Hutchings came from behind and slit his throat, the prosecutor said.

Mr Negre had been drinking with his partner on the night of March 31, but when she left him at the Cove Tavern to go home, he met Lindsay who was with two other people.

Ms McDonald said other patrons would give evidence about seeing the group with Mr Negre, who was "quite a distinctive man" being very tall and "very striking" with long, straight blond hair.

They allegedly went back to Lindsay's home, where Hutchings was a boarder, and they and a number of other people socialised and drank alcohol.

Mr Negre's partner tracked him down and after finding him to be drunk, she went home after Lindsay said he would drop him back there the next day.

Ms McDonald alleged that after Mr Negre was murdered, his body was transported to a nearby reserve in a wheelie bin.

The trial is continuing.

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Mandela 'stronger and stronger': grandson

SOUTH African peace icon Nelson Mandela is "steadily improving" six weeks after he was admitted to hospital with a recurring lung infection, his grandson said Monday.

Mandla Mandela, who is embroiled in bitter spat with family members over his grandfather's burial site, visited the former statesman at a Pretoria health facility on Sunday after missing his 95th birthday last week.

"The visit left me with a warm feeling because my grandfather is getting stronger and stronger everyday," he said.

In a statement, Mandla also issued a thinly veiled rebuke to his relatives after lawyers for more than a dozen family members had claimed in a court filing that the Nobel Peace Prize winner was in a "vegetative state".

Mandla said his grandfather's recovery "flies in the face of those who have been busy spreading lies that Madiba is in a 'vegetative state' and just waiting for his support machines to be switched off," he said, using his grandfather's clan name.

The oldest Mandela grandson, who is chief of Mandela's birth place Mvezo in the rural Eastern Cape province, has fallen out with relatives after moving the three graves of Mandela's children without consulting the family.

Following a court order, the remains were reburied earlier this month in Mandela's childhood village of Qunu, where the anti-apartheid hero has said he himself wishes to be buried after his death.

Mandla's family has laid a charge of grave-tampering against him, and Mandla is appealing the court ruling.

He was notably absent for Mandela's birthday celebrations in hospital last Thursday.

Mandla was instead carrying out community projects around his village as part of Mandela Day, a global day of charitable acts in honour of his grandfather, seen as the democratic father of South Africa.

Mandela's current hospital stay is his longest since he was released from prison in 1990, after serving 27 years under the apartheid regime.

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PNG opposition lashes asylum seeker plan

A PLAN to resettle asylum seekers in Papua New Guinea is an "agreement between two madmen", opposition leader Belden Namah says.

Mr Namah told the ABC from Singapore prime ministers Peter O'Neill and Kevin Rudd had no regard for UN conventions.

"Peter O'Neill is making decisions like a chicken with no head," he said.

"It is an agreement between two madmen."

Australia and PNG agreed on Friday that asylum seekers travelling to Australia by boat will be turned away, processed and potentially resettled in PNG.

Mr Namah called for the agreement to be debated in the nation's single house of parliament.

PNG has bigger problems than refugee processing, he said, and should not make money from asylum seekers.

Prime Minister Peter O'Neill says the scheme will boost the national economy.

"The problem in PNG is not money," Mr Namah said.

"It's not about bad financial management and corruption."

He said it was kowtowing to old colonial masters.

"Do we need to make money off asylum seekers? No."

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