Labor's budget plan failing, business says

THE federal government risks damaging economic growth if it stoops to ad hoc new taxes and revenue grabs in this year's budget, the Business Council of Australia (BCA) warns.

In its 2013/14 budget submission released on Wednesday, the group representing the nation's top 100 bosses says the government's execution of its fiscal strategy is not working and urgently needs a major rethink.

BCA chief executive Jennifer Westacott says the budget must include a clear and sensible path back to surplus, starting with an independent review of the size and scope of government and its approach to spending.

"Our research shows the government has spent more than it should in recent years," she said in a statement.

Just as stimulus measures taken during the 2008-2009 global financial crisis were being unwound, new spending programs started to build to a $49 billion impact on the budget over the forward estimates.

"Spending is not being fully offset with real savings because it has relied on revenue growth which hasn't eventuated, and because more than half of the $28 billion in recent savings claimed by the government have been made up by timing shifts that have no lasting budget benefit," she said.

Worthy but high-cost policies such as the National Disability Insurance Scheme and the Gonski eduction reforms require up to $17 billion of new funding annually in coming years, depending on how much the cash-strapped states can chip in.

The BCA estimates that for the government to meet its commitment to run surpluses on average over the medium term it would have to consistently deliver growing surpluses into the next decade to offset the budget deficits since 2008.

"With revenues expected to be volatile over the forward estimates, the government should be reprioritising outlays, and pulling back on new spending commitments until there is greater certainty over how they can be paid for," Ms Westacott said.

The submission also calls for a lift in infrastructure investment, and the development of a long-term blueprint for comprehensive tax reform.

"The size of Australia's fiscal challenge reinforces the importance in this election year of all parties putting forward economically responsible policies which support confidence, growth and jobs and which do not undermine the budget position," she said.

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Marriott, IKEA team up to launch new hotel

US hotel chain Marriott says it is teaming up with Swedish furniture giant IKEA to launch a new budget hotel brand in Germany and Europe, called Moxy Hotels.

Over the next 10 years, 150 low-cost hotels will be opened in 10 countries, Marriott chief Arne Sorenson told a news conference in Berlin.

In addition to Germany, hotels would be opened in Austria, Britain, Finland, Ireland, the Netherlands, Norway and Sweden.

The first Moxy Hotel would open in Milan at the start of next year, Sorenson said.

The new brand was targeted at a young, price-conscious, well-travelled clientele.

Separately, the US hotel group Starwood Hotels and Resorts said it planned to open 50 new hotels in Europe over the next five years, with particular emphasis on countries of the ex-Soviet Union and Turkey.

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Govts overspending by $60b: think tank

GOVERNMENTS across Australia are overspending by more than $60 billion a year, posing a risk of higher taxation, more debt and lower living standards for future generations, a think tank warns.

The Centre for Independent Studies (CIS) says government spending at all three tiers - federal, state and local councils - has been growing at an average rate of four per cent per year since 1972, and is now nearly 35 per cent of gross domestic product (GDP).

CIS research fellow Simon Cowan says the ideal size of government is less than 30 per cent of GDP, which means governments are overspending by as much as $63 billion a year.

"All government spending should be scrutinised to ensure taxpayers' dollars are not being wasted on inefficient, ineffective programs," Mr Cowan says in a new report 'TARGET30 - Towards smaller government and future prosperity'.

The report aims to prepare Australia for its future fiscal challenges by proposing ways to reduce government spending to less than 30 per cent of GDP within 10 years.

Health, welfare and education consume more than 60 per cent of government budgets, and with costs set to rise rapidly, mainly due to an ageing population and spiralling health care costs, there will be much higher taxation and enormous public debts.

"It is crucial that we act now to make these services more efficient, curb the uncontrolled growth of government, and stave off a fiscal and debt crisis like those afflicting big-spending, big-government countries in Europe," Mr Cowen says.

Much of the increase over the past 10 years has come from new spending programs.

Mr Cowen says governments should focus on finding savings from existing, lower priority programs, to pay for new spending programs and recent commitments like the Gonski education reforms and the National Disability Insurance Scheme.

"TARGET30 calls for a shift in cultural thinking. It asks Australians to think about what we really need governments to provide, and what individuals should be providing for themselves," he said.

Without action, government spending may exceed 50 per cent of GDP by 2050, he warns.

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Abbott preferred in western Sydney: poll

VOTERS in Sydney's west would rather have Kevin Rudd as prime minister than Julia Gillard, but Tony Abbott remains their top choice, a poll shows.

The Seven News/ReachTEL poll found Mr Rudd has a clear lead over Ms Gillard as the preferred prime minister - 74.5 per cent to 25.5 per cent - if voters are forced to choose between the two.

Almost 42 per cent of western Sydney residents would be more likely to vote Labor if Mr Rudd was leader of the party.

But the poll found both Ms Gillard and Mr Rudd sank below Opposition Leader Tony Abbott as preferred prime minister.

If given the choice of four prime ministers, 39.2 per cent of voters would choose Mr Abbott, followed by Mr Rudd at 26 per cent, Malcolm Turnbull at 22.1 per cent, and Ms Gillard at just 13.2 per cent.

The poll surveyed 1615 residents from 11 electorates in Sydney's west.

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Oztag finger injuries worry doctors

FOR a low-injury, non-contact sport, Oztag is causing a significant concern in medical circles.

The 40,000 Australians who enjoy the game have been warned not to ignore a common injury known as rugger jersey finger.

During the contest, which is similar to touch rugby, players pull a velcro tag from an opponent's shorts. But many are also pulling a finger tendon.

A Sydney hand surgeon, Richard Lawson, and his colleagues are so worried about the injuries that they have written a letter to the Australian Medical Journal.

They say people who are treated within 10 days are likely to recover fully. Those who wait can expect a less satisfactory outcome, possibly involving difficult surgery.

"Primary-care doctors and Oztag participants should be aware that hand injuries sustained while playing the sport may be serious, and early expert evaluation is advisable," says the letter.

Oztag, also known as tag rugby, is played by over 40,000 people around Australia and is considered a low-injury, non-contact sport.

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Twenty Islamists killed in Nigeria

NIGERIA'S military says it killed 20 Boko Haram Islamists while repelling an attack by the extremist group in the embattled northeastern state of Borno.

"Boko Haram terrorists attempted to attack a military barracks (in Borno) at about 5am" (1500 AEDT) on Sunday, spokesman Lieutenant Colonel Sagir Musa said in a statement.

He said the attack occurred in the village of Monguno, about 200km from Borno's restive capital of Maiduguri, considered Boko Haram's home base where the radical group has been blamed for scores of deadly attacks.

The raid on the military barracks "was repelled", Musa said. "The encounter led to the deaths of 20 Boko Haram terrorists."

He said the gunmen, armed with Kalashnikovs and rocket-propelled grenade launchers had stormed the military site in three 4X4 trucks and eight motorcycles.

Boko Haram's insurgency is estimated to have left 3000 people dead since 2009, including killings by the security forces.

The Islamists have said they are fighting to create an Islamic state in Nigeria's mainly Muslim north, but their demands have repeatedly shifted.

A video posted on YouTube last month featured gunmen claiming to be from Boko Haram who said they abducted a French family of seven from a Cameroon nature park near the Nigerian border.

The video marked a departure for the Islamist group, which had never before claimed the kidnapping of a Westerner and some have questioned whether the Nigerian Islamists did in fact carry out the abductions.

France has said Boko Haram is responsible for the attack and is likely holding the family members, including four children, in Nigeria.

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Rio police occupy slum near airport

BRAZILIAN police have occupied crime-infested slums near Rio de Janeiro's international airport and seaport as part of efforts to drive out drug traffickers ahead of next year's soccer World Cup.

The operation, which began at 4.55am local time (1855 AEDT) on Sunday, involved more than 1300 police and members of the military backed by mechanised units of the Brazilian navy, which entered the favelas of Caju and Barreira do Vasco and seized control of their narrow streets.

So far, authorities have not encountered any resistance from residents of the townships whose combined population has reached about 20,000. And they were quick to declare victory.

"The operation has been a success," military police Colonel Frederico Caldas told O Globo television. "This very important, strategic area was taken without firing a shot."

For years, the favelas have been a stronghold of drug-trafficking gangs that held sway over the area and terrorised the local population.

Now, the local residents have cautiously welcomed the operation that they hope will help restore law and order.

"I think this is all good," said a 77-year-old woman, who lives in Caju but remains reluctant to reveal her name for fear of retribution on the part of the criminals. "I hope now we will have more security," she told AFP.

According to police, their next target will be violence-plagued Mare, an area near the airport largely controlled by drug gangs and militia units.

In 2008, Rio authorities began cleaning up lawless favelas, or slums, one by one, hoping to finish the job before the soccer World Cup of 2014 and the Olympic Games two years later, which are likely to bring to Rio millions of tourists.

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At least 50 Islamists killed in Mali

AT least 50 al-Qaeda-linked rebel fighters have been killed in recent days in clashes with French and Malian troops near the town of Gao in northern Mali, a Malian military source says.

"Fighting continues on Sunday morning some 60km north of Gao between Islamists and Malian troops supported by the French army. We have the situation under control," said a Malian military source contacted by phone from the capital Bamako.

"At least 50 MUJAO Islamists have been killed since the day before yesterday (Friday)," he added, referring to rebels from the Movement for Oneness and Jihad in West Africa.

Gao, the largest city in northern Mali, was under the control of MUJAO before it was driven from there by the French-backed international offensive that was launched on January 11.

A Malian soldier who had taken part in the fighting on Friday evening near Gao had told AFP on Saturday that the Malian army had destroyed a MUJAO base.

He said the group suffered heavy losses during the fighting, which took place in In-Manas, 60 km east of Gao.

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Residents flee as Qld's Dalby floods

RESIDENTS in the southeast Queensland town of Dalby are fleeing floodwaters as the expected peak of 3.2 metres could go even higher.

Western Downs Mayor Ray Brown says water from the Myall Creek started entering homes when the level reached 2.8m.

"Power has been off to some homes since 4.30pm (AEST), which is what we knew would happen when water flooded in, and residents and the travelling public are being moved to safe areas," he told AAP just before midnight on Saturday.

The peak was expected to be 3.32 metres before midnight but could go higher, Mr Brown said.

Dalby Showgrounds has become a safe area but Mr Brown said it wasn't a fully-fledged evacuation centre.

Visitors to the area had moved their caravans from camp grounds to the showgrounds.

"Residents in southeast Queensland have been given flood warnings, with people in the Lockyer Valley told to evacuate if needed.

An emergency alert was issued for the Lockyer Valley region, west of Brisbane, on Saturday night.

The Lockyer Valley regional council has advised residents to monitor the situation and evacuate themselves if necessary.

Flooding is expected for Forest Hill, Laidley, Glenore Grove and areas downstream.

An emergency flood warning has also been issued for Banana Shire Council.

"There is an imminent threat through a Grevillea Creek flood," a statement from the Department of Community Safety said at 10.30pm on Saturday.

"There is an immediate threat to life or property. Leave the area now or go to higher ground."

It's another blow to residents who experienced significant flooding on the Australia Day weekend and a severe flood two years ago.

The council is also monitoring the nearby towns of Chinchilla and Moonie which are on flood alert.

Heavy rain has also fallen in the regions around Mackay, Bundaberg and Rockhampton on the state's central coast and the Gold Coast in the southeast.

Forecasters expect about 100mm of rain to fall on Bundaberg in the next 24 hours.

The Bureau of Meteorology has advised the rain will continue in the short term and there will be heavy falls later this month.

It has issued 13 flood warnings, most of which are for the state's southeast region.

Bureau of meteorology senior hydrologist Andy Barnes said late on Saturday the impact of the floods affecting the state were relatively minor at the moment.

"It's fairly widespread flooding affecting quite a few catchments," he said.

"Although we'll see continued rain over the southeast for about the next 12 hours it won't be too intense.

"At this stage we're not expecting there to be any real worsening of the situation we've got."

Mr Barnes said moderate to heavy rain may fall on Sunday, but that that is expected further west to where most of the flood warnings have been issued.

Meanwhile the government is keeping a close eye on its dams in the southeast.

Water Supply Minister Mark McArdle says releasing water from the dams will reduce the risk of flooding.

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Pedestrian dies in Latrobe road accident

A WOMAN has died after being hit by a car while crossing a road in the Latrobe Valley in eastern Victoria.

Police said the woman was crossing the road at Morwell when she was hit by a west-bound car on Princes Drive just before 7.30pm (AEDT) on Saturday.

She was critically injured and taken to hospital, where she later died.

The driver of the car was taken to hospital for shock.

He is helping police with their investigation.

Anyone with information is asked to contact Crime Stoppers.

The incident takes Victoria's road toll to 41, compared to 50 at this time last year.

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