Sydney teen mum reveals abduction ordeal

A TEENAGE mother has described her terrifying ordeal after her baby son was abducted at knife point in Sydney by her ex-partner.

As the hunt continues for Steven Hume, who forced his way into the Chester Hill home of his ex-girlfriend on Thursday night, the baby's mother said she tried to escape.

Casey Mifsud, 16, told the Seven Network Hume broke into her southwest Sydney home, took out a knife and told her to get in the car with her eight-month old son.

"He told me he was going to kill me ... and my son," said Ms Mifsud, who had cuts to her face.

"Every time he would ask me a question and I would answer it, he would punch me in the head ... smash my head into the car window and then told me that he's really sorry and that he only does it because he loves me."

When Hume stopped for tissues to wipe her bloody face she fled the car with her baby.

Ms Mifsud said she banged on a driver's door begging for help but the driver took off.

This is when the 24-year-old grabbed baby Zhaiden and took off.

Hume's car was found abandoned on Avon Dam Road at Bargo, south of Sydney, on Friday morning after it slammed into a tree.

Ms Mifsud said she thought her child was dead until one of Hume's family members handed him to Campbelltown police station around 5pm (AEST) on Friday.

"It just makes me feel like I failed as a mum," Ms Mifsud said while sobbing heavily.

"He should get jail time for beating a woman."

The baby is currently in the care of the NSW Department of Family and Community Services.

Hume, who has a thin build, brown hair and several tattoos on his arms and chest, was last seen wearing a blue jumper and green track pants.

Police warn he's considered dangerous and should not be approached.

"I ask that members of the public do not approach him, but contact triple zero immediately," Superintendent Dave Eardley, from the Bankstown Local Area Command, said on Saturday.

"I urge Steven Hume to attend the nearest police station and hand himself in, or contact us and commence some dialogue."

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Spain train diver facing charges

The driver of a speeding train that crashed in Spain has refused to respond to police questioning. Source: AAP

THE driver of a train that hurtled off the rails killing 78 people in Spain faces possible charges as doctors work to identify the last three victims of the country's worst rail disaster in decades.

As Spain mourned on Saturday, the city of Santiago de Compostela where the crash occurred is preparing a funeral for Monday in its cathedral, a destination for Catholic pilgrims from around the world.

Police have accused the driver, identified by media as Francisco Jose Garzon Amo, 52, of "recklessness" in Wednesday night's devastating crash.

They said late on Friday that he refused to answer their questions in his hospital bed and the case has been passed to the courts.

The train was said to have been travelling at more than twice the speed limit when it hurtled off the rails and slammed into a concrete wall, with one carriage leaping up onto a siding.

Smoke billowed from the gutted cars as bodies were strewn across the tracks. Locals said they came running from their houses to drag passengers from the wreckage.

The grey-haired driver, who reportedly boasted of his love for speed online, was under police surveillance in hospital, said Jaime Iglesias, police chief in the northwestern Galicia region.

The driver faces criminal accusations including "recklessness", Iglesias told a news conference, but has not yet been charged.

A police spokesman later said the driver had refused to respond to police questioning on Friday and the courts would now decide on judicial action.

Spanish media published photographs of the man they identified as Garzon after the crash, with blood covering the right side of his face.

Leading Spanish newspaper El Pais said the driver of the train had been unable to brake in time.

Seventy-eight passengers perished, three of whom have yet to be identified, and 178 were injured, regional authorities said.

Following the crash, weeping relatives waited in a conference centre in the city for news of their loved ones, attended by counsellors.

At least seven foreigners are among the dead - a US citizen, an Algerian, a Mexican, a Brazilian, a Venezuelan, an Italian and a national of the Dominican Republic, a judicial source said.

Most of the injured are Spanish, but at least eight were foreigners from Argentina, Britain, Colombia, the US and Peru.

The number of people still in hospital dropped to 81, including 28 adults and three children who were in critical condition, Galician Health Minister Rocio Mosquera said.

The driver, while still trapped in his cab, told railway officials by radio that the train had taken the curve at 190 kilometres an hour, more than double the 80 km/h speed limit on that section of track, El Pais said, citing unidentified sources in the investigation.

"I was going at 190! I hope no one died because it will weigh on my conscience," he was quoted as saying.

He has reportedly been with state rail company Renfe for 30 years, including 13 years of experience as a driver.

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1267 boat people arrived since PNG deal

More than 1000 asylum seekers are waiting on Christmas Island to be transferred to PNG. Source: AAP

THE number of asylum seekers arriving by boat since the government announced its hardline resettlement policy more than a week ago has climbed to 1267.

Home affairs Minister Jason Clare released two statements on Saturday evening revealing details of two more boats intercepted on Friday.

One had 94 passengers and two crew on board, while the other was carrying 123 passengers and two crew.

People on both vessels have been taken to Christmas Island for initial identity and health checks before they are transferred to Papua New Guinea.

A spokesman for Mr Clare confirmed a total of 1267 arrivals on 16 boats since the government introduced the new PNG policy on July 19.

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

More than 1000 asylum seekers are already waiting on Christmas Island to be transferred to PNG.

Meanwhile, an independent investigation into riots that burnt down accommodation at the Nauru detention centre and allegations of asylum seekers being raped on Manus Island will be set up this week.

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Syrian forces make gains in Homs

REGIME forces backed by Hezbollah now control half of the Khaldiyeh district of Homs after ousting rebels in fierce fighting in the central Syrian city, a watchdog says.

"Loyalist forces backed by fighters from Hezbollah have advanced over the last 24 hours and now control 50 per cent of Khaldiyeh," the Syrian Observatory for Human Rights said on Saturday.

Its chief, Rami Abdel Rahman, said "there was continuous heavy mortar and artillery fire" and the rebel district was still being pounded.

He said rebels were putting up "fierce resistance" amid "very intense clashes".

Militant network the Syrian Revolution General Commission also reported heavy fighting in the district that has been besieged by regime forces for more than a year.

"Khaldiyeh is being targeted by an uninterrupted heavy bombardment, and on the ground there is fierce fighting between Free Syrian Army fighters and regime forces backed by Lebanon's Hezbollah trying to take the district," an SRGC statement said.

It and the observatory both said the Old City district of Homs - dubbed the "capital of the revolution" against President Bashar al-Assad - was being pummelled too.

The latest regime offensive on besieged rebel-held neighbourhoods of Homs is now in its fourth week.

Government forces are seeking to secure another victory like the one in Qusayr near the border with Lebanon in June, when Hezbollah was key in retaking the strategic town.

Hezbollah, the most powerful military force in Lebanon and a staunch ally of the Assad regime in Syria, has had its military wing blacklisted by the European Union as a terrorist group.

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Hong Kong shares end 0.31% higher

HONG Kong shares have closed up 0.31 per cent following small gains on Wall Street and with China unveiling measures to help boost the mainland economy.

The benchmark Hang Seng Index added 67.99 points on Friday to 21,968.95 on turnover of HK$44.43 billion ($A6.24 billion).

Extending a week of quiet trade in the Chinese city, volume totalled HK$44.43, down from HK$45.33 billion on Thursday.

At the start of the week turnover was just HK$38.49 billion, the market's lowest point since September.

The slow trade has meant hope the market might push the 22,000 points barrier this week prove elusive.

"We still believe 22,000 is a kind of resistance," Steven Leung, head of institutional sales at UOB Kay Hian, told Dow Jones Newswires.

Investors, he added, were still in profit-taking mode after the index rallied more than 2 per cent on Tuesday.

Financial shares were one of the few areas that saw some gains.

Mainland bank shares closed mostly higher. China Construction Bank rose 0.4 per cent to HK$5.78 and Bank of China gained 0.3 per cent to HK$3.28.

Shares of Hong Kong insurer and index heavy AIA rose 0.4 per cent to HK$35.85 after reporting first-half results that comfortably beat expectations.

The company reported a 26 per cent jump in the value of new business, topping the 22 per cent growth expected by analysts.

Chinese shares ended down 0.51 per cent on Friday due to persistent worries over the health of the domestic economy, dealers said.

The benchmark Shanghai Composite Index fell 10.32 points to 2,010.85 on turnover of 65.5 billion yuan ($10.7 billion).

The index rose 0.91 per cent for the week on hopes for policies to boost economic growth.

"The market will likely be stuck in consolidation mode before there are signs of an economic recovery," Zheshang Securities analyst Zhang Yanbing told AFP.

A government plan to cut excess production capacity in 19 sectors hit coal producers and steel firms.

Qinghai Jinrui Mineral Development lost 4.29 per cent to 7.81 yuan while Yanzhou Coal Mining fell 2.28 per cent to 9.87 yuan.

Inner Mongolia Baotou Steel Union dropped 2.03 per cent to 3.87 yuan and Chongqing Iron & Steel shed 1.06 per cent to 2.79 yuan.

Heavyweight financial shares also fell.

Industrial Securities lost 2.01 per cent to 9.26 yuan, Agricultural Bank of China fell 1.20 per cent to 2.48 yuan and China Life Insurance slid 0.61 per cent to 13.13 yuan.

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Aussie getaways cheaper despite $A fall

Domestic travel and hotel prices have become cheaper despite a fall in the currency. Source: AAP

AUSTRALIAN holidays have become cheaper despite a sharp fall in the local currency.

Domestic travel and hotel prices dropped by four per cent during the June quarter, even as the Australian dollar fell from a peak of 105 US cents to below 92 US cents.

A weaker currency potentially encourages more overseas and local tourists to holiday within Australia, which in theory drives up accommodation costs.

Despite this, local holiday expenses posted the biggest decrease in three years, Tourism Research Australia figures show.

Meanwhile, international travel costs rose by half a per cent.

Tourism Australia (TA) managing director Andrew McEvoy says cheaper flights are stimulating competitive.

"Campaigns and offers being run by the airlines and travel operators are helping to drive down prices and offer domestic travellers great value for money," he said.

TA has launched a campaign to encourage families considering an overseas trip to instead stay in Australia.

A recent survey of 1000 people by TA found Australians preferred local beach holidays to overseas getaways.

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Spain train driver detained over crash

The driver of a train that derailed in Spain is being questioned after admitting to speeding. Source: AAP

SPANISH police say they have formally detained the driver of a fast-moving train that flew off the tracks, killing dozens of people, while they revised down the death toll.

"He has been detained since 8pm (on Thursday). He is accused of crimes related to the accident," said Jaime Iglesias, the chief of police in the northwestern region of Galicia where the accident happened, on Friday.

Police also said on Friday they had found 78 bodies and have been able to identify 72 of the victims.

Government officials in Galicia in northwestern Spain had earlier put the death toll from Wednesday's accident at 80.

The driver, identified by local media as Francisco Jose Garzon Amo, 52, is in hospital after the train hurtled off the tracks late on Wednesday while apparently going at twice the legal speed limit in one of Spain's worst rail disasters ever.

He was still being treated for light injuries sustained in the crash on the outskirts of the pilgrimage city of Santiago de Compostela, a police source said.

State train company Renfe said the driver was a 30-year veteran of the firm with more than a decade of train driving experience.

The train's data recording "black box" and other documents were passed over to the judge in charge of the investigation on Thursday.

Attention has so far centred on Garzon Amo, one of two drivers on the train, after media reports described him as a speed freak who once gleefully posted a picture on his Facebook page of a train speedometer showing it was travelling at 200km/h.

Below the photo he wrote the caption: "I am on the edge, I can't go faster or else I will be fined."

His Facebook page has since been taken down, but Spanish newspapers quoted another of his posts as saying: "What fun it would be to race the Guardia Civil (police) and pass them, causing their radar to blow up hehehe. What a huge fine that would be for Renfe."

The El Pais newspaper, citing sources close to the investigation, said the driver stated immediately after the crash that he had been travelling at 190km/h on a curve with a speed limit of 80km/h.

"I am going at 190! I hope no one died because it will weigh on my conscience," he reportedly told supervisors over the radio while trapped inside the cab after the eight-carriage train flew off the tracks on a curve at 8.42pm.

Dramatic video footage from a security camera showed the fast-moving train, which was travelling from Madrid to the port of Ferrol, slamming into a concrete wall at the side of the track as the engine overturned.

On Friday, the paper reported the driver was unable to brake in time.

"The railway warning systems detected that Francisco Jose Garzon Amo, the driver of the Alvia train that departed Madrid, was travelling at 190 kilometres an hour when it should not exceed 80," El Pais wrote.

"The driver acknowledged that the alarm went off in the control panel and he tried to brake but was not able to avert the tragedy," the newspaper added.

Prime Minister Mariano Rajoy, a native of the city, declared three days of national mourning after visiting the scene of the accident.

Renfe president Julio Gomez-Pomar Rodriguez told Cadena Cope radio station that it was too early to speculate about the cause of the disaster, but the Spanish secretary of state for transport, Rafael Catala, said excessive speed appeared to be the culprit.

"The tragedy that happened in Santiago de Compostela seems to be linked to excessive speed, but we are still waiting on the judicial investigation," he told radio station Cadena Ser.

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Coalition would delay schools funding

The coalition says it won't change new school funding arrangements for at least a year if elected. Source: AAP

A COALITION government will let Labor's Gonski-based funding system stand for a year if it can't get legislation repealing it through parliament.

Opposition Leader Tony Abbott has written to school principals across the country explaining he has "deep reservations" over the government's new Better Schools funding model.

He said a coalition government would use the year to figure out how to "get the model right" as leaders in Western Australia and the Northern Territory continued to criticise the $15 billion plan.

WA Premier Colin Barnett emerged from a one-hour meeting with Prime Minister Kevin Rudd on Friday without a breakthrough and said the legislation was "inadequate".

He has consistently said the state would not become part of the program until concerns about control were addressed, claiming other states had been "bullied" into it.

Mr Rudd dismissed Mr Barnett's concerns as "nonsense" as he urged WA to sign up.

NT Chief Minister Adam Giles announced he had rejected the plan, which he said was "con".

He said the federal government continued to release misleading calculations based on false assumptions about how much funding Territory schools currently received.

Victoria was expected to sign up on Friday after Premier Denis Napthine revealed on Wednesday he was willing to be flexible.

But no agreement was announced.

In the letter to school principals, Mr Abbott and opposition education spokesman Christopher Pyne said if there was no national agreement on school funding in place if the coalition was elected, they would move to delay the start of the proposed model by one year.

"If Labor and the Greens use the parliament to stop our plan to delay the new model, the coalition will allow it to operate for one year (until 2015) while we work out how to get the model right," the letter states.

Though previously they have been inconsistent on the conditions under which they would keep the plan.

Mr Abbott has said all jurisdictions would have to sign up, while Mr Pyne said it needed an overwhelming majority.

But the commitment has been slammed as cruel and worthless by the union representing Australia's public school teachers.

Australian Education Union federal president Angelo Gavrielatos says the coalition's continually shifting position makes the latest commitment worthless.

"Let's be clear what this letter actually means - at best it merely delays the massive funding cuts of ripping up Gonski to 2015 instead of 2014," he said on Friday.

"What a cruel thing it would be for additional Gonski funding to flow to schools for just one year, before being ripped away from students."

So far only NSW, the ACT, South Australia and Tasmania have signed up to the $15 billion better schools plan.

Independent and Catholic schools have also endorsed it.

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Iraq police station hit by mortars, 9 dead

MILITANTS have attacked a police station in north Iraq with mortar rounds and automatic weapons, killing nine police, doctors and officials say.

The violence on Wednesday comes a day after an al-Qaeda front group claimed brazen assaults on two prisons in Iraq that killed more than 40 people, among them 20 security forces members, and saw hundreds of inmates, including senior militants, escape.

Security forces are desperately hunting the prisoners who escaped in Sunday night's jailbreaks to prevent them rejoining the ranks of the militants and carrying out further attacks.

Wednesday's assault on a police station about 60 kilometres south of the northern city of Mosul, also left two policemen wounded, the sources said.

It was followed by a roadside bomb explosion as emergency personnel travelled to the scene, wounding another two people.

In a separate incident, gunmen killed a man in Baquba, a city north of Baghdad.

Iraq has faced years of attacks by militants, but analysts say widespread discontent among members of its Sunni Arab minority, which the government has failed to address, has fuelled the surge in unrest this year.

Iraqi security forces are frequently targeted by militants opposed to the government in Baghdad.

With the latest unrest, more than 650 people have been killed so far in July, making it the deadliest month in a year marked by spiralling violence.

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Baby boy among dead in asylum boat tragedy

FORTY-FOUR suspected asylum seekers are still missing after their boat sank off the Indonesian coast of Java.

A baby boy, a 10-year-old girl and a woman died in the incident and as many as 157 people have been rescued, according to Associated Press (AP).

The boat sank in heavy seas off the Indonesian fishing town of Cidaun in western Java.

Rescuers set out from the town in their own boats and vessels lent by police and fishermen.

Local police spokesman Martinus Sitompul told AP around 204 asylum seekers from Sri Lanka, Iran and Iraq were on the boat.

They began their journey on Tuesday on a smaller boat from Jayanti, a coastal town in Cianjur, and were supposed to meet a larger ship at sea to complete the voyage to Australia.

Their overloaded boat, built to carry only 150 passengers, sank about nine hours into the trip due to a leak.

Some of the would-be refugees scrambled for the lifeboat, while others swam before being rescued.

A search for 44 people believed missing continued on Wednesday with police, fishermen and local villagers scouring the waters.

Rochmali, a rescuer at the scene, told AP the exact number missing remains unclear since some survivors may have fled to avoid authorities.

The Australian Maritime and Safety Authority told AAP it had offered to help Indonesian authorities with the rescue operation if needed.

Prime Minister Kevin Rudd said the government is monitoring the unfolding tragedy.

"All of our agencies are actively following this and ensuring that everything that can be done is being done," Mr Rudd told reporters in Melbourne on Wednesday.

He said the incident underlined the need for a tough asylum seeker policy.

"We are seeing too many drownings, we are seeing too many sinkings, too many innocent people being lost at sea."

Opposition Leader Tony Abbott said the only way to end tragedies like this was to stop the boats from coming.

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

"I'm not crass enough to directly blame anyone in this country for tragedies at sea.

"But Mr Rudd should be man enough to admit that it was a terrible tragic mistake that his government made back in 2008 when they reversed the policies that worked."

Immigration Minister Tony Burke said on Wednesday he would consider the government's tough new asylum seeker policy a success when the drownings stopped.

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PNG warns Rudd, Abbott over asylum issue

70 men were flown out of the Manus Island detention facility amid allegations of rape and torture. Source: AAP

PAPUA New Guinea has warned Labor and the coalition not to impugn its dignity over the asylum seeker issue, with 70 men 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 a boat with around 204 asylum seekers sank off the Indonesian coast of Java.

A baby boy, a 10-year-old girl and a woman died in the incident and as many as 157 people have been rescued, according to Associated Press.

The boat sank in heavy seas off the Indonesian fishing town of Cidaun in western Java.

"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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Google expected to unveil new tablet

GOOGLE is expected to unveil the next generation of its Nexus tablets in its latest challenge to Apple's market-leading iPad and Amazon.com's Kindle Fire.

The new devices are likely to be the main attraction on Wednesday at a San Francisco event being hosted by Google Inc executive Sundar Pichai, who oversees the company's Android and Chrome operating systems.

The Nexus line of tablets that came out a year ago all run on the Android software that also powers hundreds of millions of smartphones.

Google hasn't revealed the reason for Wednesday's event, which is scheduled to start at 9am (0200 AEST Thursday).

But pictures of what's purported to be the upgraded versions of the Nexus tablet have been posted on the internet during the past few days, fuelling speculation that Google is poised to release the new devices.

The current versions of the Nexus tablets feature seven-inch and 10-inch displays and are set up to encourage users to buy music, video and applications from Google's Play store.

Since its introduction last summer, the seven-inch model has proven particularly popular among consumers looking for a less expensive alternative to Apple's iPad. A Nexus 7 with 16 gigabytes of storage, sells for $199, the same price as a Kindle Fire HD with a seven-inch display. That compares to $499 for an iPad with a 10-inch screen and the same amount of storage. Google sell a Nexus with a 10-inch display and the same amount of storage for $399.

The popularity of the less expensive and smaller Nexus and Kindle Fire tablets is one of the main reasons that Apple released the iPad Mini with an eight-inch screen last year. Apple sells its smaller tablet for $329.

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Four suspected NSW armed robbers charged

Police have charged four men suspected over a string of armed robberies in Sydney's south. Source: AAP

FOUR young men suspected of a series of armed robberies in Sydney's south have been charged.

Drugs, a firearm part and ammunition were also seized during searches of the men and a car, police say.

Officers from tactical operations and the dog squad arrested three of the men, 32, 23 and 20, on a main road at Merrylands on Tuesday afternoon.

The fourth man, 19, was arrested inside a club on the same road shortly after.

The men were charged with a raft of offences, including robbery while armed with a dangerous weapon, aggravated break and enter and supplying and possessing drugs.

Three men appeared at Fairfield Local Court on Tuesday and the 19-year-old is due before the same court in August.

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Vic close to call on schools plan: Shorten

The Catholic education sector has backed the government's national schools improvement plan. Source: AAP

THE federal government expects to know within days whether Victoria will sign up to Labor's schools funding plan.

Prime Minister Kevin Rudd and Education Minister Bill Shorten on Tuesday met with Victorian Premier Denis Napthine in a bid to convince him to get on board the Better Schools Plan.

Mr Shorten said the talks were "constructive" and "positive" but there were more intensive discussions to come in following days.

He was focused on achieving a "mutual win-win" for children in Victoria's state schools, not on setting a deadline for Victoria.

"There's no doubt in my mind that we'll know in the next few days," he told reporters in Melbourne after the meeting.

Victoria stands to gain $4 billion in additional funding for its school system under the arrangement.

Mr Napthine described the talks as "fruitful", but said keeping school administration in local hands was also an important priority for the state's future.

"We want assurances from the federal government with regard to the management of our schools," he said.

"It's absolutely vital for us that our schools are managed by local school councils, local school principals and local school committees, rather than faceless bureaucrats in Canberra."

Earlier, the Catholic schools sector announced it was backing the government's national plan for schools improvement.

They join the independent schools sector in supporting Labor's funding offer, along with the state governments of NSW, ACT, South Australia and Tasmania.

Catholic schools stand to gain about $1.6 billion of the $15-plus billion in extra funding pledged by the government for the national schools system over six years.

Victoria, Queensland and the Northern Territory remain unconvinced, and although negotiations continue it's highly unlikely Western Australia will reverse its staunch opposition.

Getting Victoria across the line would be a major coup for the Rudd government as it prepares for an election as soon as August 31.

The coalition has vowed to scrap the government's schools plan unless an "overwhelming majority" of states sign on, and with Victoria on side Labor could argue it has the numbers.

Mr Rudd said if NSW could see the benefits of signing on, he was sure Victoria could too.

"I'm not sure that any mum and dad, or person in charge of a local parent community in a school in the state system in Victoria, would want to say goodbye to that," he said.

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WA prison farm escapee captured nearby

A dangerous escapee from Karnet Prison Farm south of Perth has been recaptured by police. Source: AAP

A DANGEROUS escapee from Karnet Prison Farm south of Perth has been recaptured by police.

Bradley Edmund Wilcott, a 54-year-old sex offender, left the grounds of the minimum security facility around noon (WST) on Monday.

Police warned he was unpredictable and should not be approached.

On Tuesday evening, police said he had been found and captured without incident in the general vicinity of the prison around 4pm.

He has been charged with escaping legal custody and will appear in Armadale Magistrates Court on Wednesday.

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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 Ian Walker 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 Walker 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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Eurozone debt burden hits all-time high

OFFICIAL figures show that the debt burden of the 17 European Union countries that use the euro have hit all-time highs in the first quarter despite austerity measures designed to return public finances to health.

Eurostat, the EU's statistics office, said on Monday that government debt as a proportion of the total annual gross domestic product of the eurozone pushed up to a record 92.2 per cent in the first quarter of 2013 from 90.6 per cent the previous quarter.

Though a number of countries are pushing through spending cuts and tax rises, many remain mired in recession - shrinking economies can make the debt dynamics look less favourable.

The highest debt-to-GDP ratio in the eurozone was Greece's 160.5 per cent, followed by Italy's 130.3 per cent.

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Hong Kong shares end 0.25% higher

HONG Kong shares ended 0.25 per cent higher on Monday, in line with an upturn on Shanghai's main index.

The benchmark Hang Seng Index climbed 54.08 points to 21,416.50 on turnover of HK$38.49 billion ($A5.44 billion).

The rise was welcome news for the market but trade volume nonetheless slumped to its lowest point since September.

Ben Kwong, chief operating officer at KGI Asia, told the Dow Jones Newswires that investors needed "some story to buy or sell".

"Right now, there is no story... the market as a whole is a non-event," he said.

Banking shares were particularly mixed after China's central bank on Saturday removed a lower limit on lending rates, leaving them free to set their own rates in a move analysts said could lead to narrower interest margins.

Smaller banks were hit the hardest on fears the move would spark a price war in the industry, with China Citic Bank falling three per cent to HK$3.51.

Jewellery retailer Luk Fook rose 2.3 per cent to HK$9.70, following a two per cent jump in gold prices.

China Resources Power, meanwhile, climbed 5.22 per cent following an announcement that the energy giant had scrapped a plan to combine with a sister company after shareholders rejected the proposal.

Chinese shares closed up 0.61 per cent. The benchmark Shanghai Composite Index rose 12.11 points to 2,004.76 on turnover of 69.6 billion yuan ($A12.37 billion).

"The fluctuation in share prices was caused by funds seeking short-term investment opportunities in smaller firms," Haitong Securities analyst Zhang Qi told AFP.

Media shares and environmental stocks led the gains. Liaoning Publishing & Media surged 6.51 per cent to 7.04 yuan while Shanghai Xinhua Media gained 4.98 per cent to 5.69 yuan.

Tianjin Capital Environmental Protection Group jumped 6.00 per cent to 7.77 yuan.

Bank of Nanjing rose 0.76 per cent to 7.95 yuan, while Bank of Communications fell 1.30 per cent to 3.79 yuan.

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UBS settles US mortgage lawsuit

SWISS banking giant UBS says it has settled a lawsuit linked to US subprime housing mortgages which sparked the 2008 global financial crisis.

The bank did not specify how much the settlement amounted to, but said it has set aside 865 million Swiss francs ($A1.01 billion),in the second quarter to meet litigation costs including the case.

"The full cost of the settlement is covered by litigation provisions established by UBS during the second quarter of 2013 and in prior periods," Switzerland's biggest bank said.

UBS and 17 other financial institutions were sued by the US Federal Housing Finance Agency in September 2011 for violating federal securities laws when selling residential mortgage-backed securities to government-backed lenders Fannie Mae and Freddie Mac.

The agency accused the 18 firms of misleading Fannie and Freddie about the credit-worthiness of the assets.

"UBS has reached an agreement in principle with the Federal Housing Finance Agency," UBS said.

The bank added that the deal, which still requires a final go-ahead from the different parties, would settle claims connected to the securities between 2004 and 2007.

Despite setting aside massive provisions, the bank, which is due to announce its second quarter results on July 30, said it would post a net profit of around 690 million francs for the three months ending June.

That is a jump of 62.5 per cent from a year ago and a stark improvement over the first quarter, when net profit slid 4.5 per cent. In the fourth quarter of 2012, UBS posted a loss of 1.9-billion francs.

The bank said its operating profit before tax would reach about 1.02 billion francs, an increase of 7.3 per cent over the second quarter in 2012.

Analysts hailed the better-than-expected results and the settlement of the mortgage securities suit, with Panagiotis Spiliopoulos of Vontobel predicting "juicy dividend payouts in the years to come".

Following the announcements, the bank's stocks jumped 3.4 per cent to 18.21 francs in midday trading, outperforming the Swiss stock exchange's main index, which gained just 0.12 per cent.

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Plain packs reduces allure of cigs: study

SCIENTISTS say they have evidence that plain packaging for cigarettes diminishes the appeal of smoking, as anti-tobacco campaigners suggest.

European countries are considering whether to follow Australia, which last year became the first country in the world to sell cigarettes in plain packets.

Cigarettes are now sold in identical olive-brown packets bearing the same typeface, in addition to health warnings.

Researchers questioned 536 smokers in Victoria during the transition phase, when both branded and plain-pack products were on sale.

Nearly three-quarters of those interviewed were smoking from plain packets, and the others from branded packets.

Plain-pack smokers were 66 per cent likelier to think their cigarettes were of poorer quality compared with a year earlier, and were 70 per cent likelier to say they found them less satisfying.

They were also 81 per cent likelier to have thought about quitting at least once a day during the previous week and to rate quitting as a higher priority in their lives compared to smokers using brand packs.

The study, published on BMJ Open by the British Medical Journal, did not follow up these smokers, to see what they thought or did after the transition period.

But, it says, the "early indication" is that drab packaging takes the gloss off cigarette brands.

"Plain packaging is associated with lower smoking appeal, more support for the policy and more urgency to quit among adult smokers," it says.

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Three dead in Russian chopper crash

AT least three people, including two British citizens, were killed in Russia's far north when a helicopter crashed into them while they were standing on the ground, officials say.

A distress signal had already been received on Sunday from the Eurocopter-120 before it made the hard landing on the north of the Kola peninsula in the Murmansk region.

"Three people were killed, two of them are British citizens," the local branch of the emergencies ministry said in a statement on Russian news agencies.

The RIA Novosti state news agency said that the two foreigners were believed to be tourists.

The identity of the other individual said to have been killed was not immediately clear.

Reports said the three appeared to have been crushed to death by the helicopter while standing on the ground and were not inside the aircraft at the time of the crash.

"After take-off, the helicopter tilted and fell onto its side. Three people who were on the ground at the time died of their injuries," a source in Russia's aviation agency Rosaviatsia told RIA Novosti.

Reports said it was possible that the tourists had been taken by helicopter to the remote area for fishing and then killed by the aircraft after it had deposited them in bad weather.

The Life News website described the Britons as "VIP tourists" who were taking part in a fishing trip especially for foreigners.

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Asylum boat detected with 60 on board

A suspected asylum seeker vessel was detected in waters near Christmas Island. Source: AAP

THE navy is escorting an asylum seeker boat with about 60 passengers on board to Christmas Island.

The Australian Maritime Safety Authority (AMSA) received a call from the vessel on Sunday morning, and asked the navy to assist.

A navy ship arrived in the early afternoon, and after boarding the asylum vessel began escorting it toward Christmas Island, an AMSA spokesman told AAP.

Under the Rudd government's tough new asylum seeker deal, any asylum seekers arriving by boat without a visa after last Friday will be sent to Papua New Guinea for processing.

If they're found to be genuine refugees, they may be resettled in PNG but not in Australia.

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Philippe ascends throne of divided Belgium

Belgium's King Albert II has officially abdicated in a solemn ceremony at the royal palace. Source: AAP

PHILIPPE has ascended the throne of Belgium as its seventh king amid National Day celebrations marked by hopes the fragile nation can remain united.

"I swear to abide by the constitution and the laws of the Belgian people," Philippe, 53, and dressed in full military uniform, said on Sunday in the country's three languages - French, Flemish and German.

"I am aware of the responsibilities weighing on my shoulders," he added, after the abdication of his father Albert II after 20 years at the helm of the linguistically-split country at the heart of Europe.

Albert, 79, abdicated in favour of his eldest son at a solemn ceremony in the royal palace's chandelier-laden throne room after saying he felt too old and too fragile to continue to reign.

In his last speech, Albert reiterated a call to the country's leaders "to work tirelessly in favour of Belgium's cohesion".

His voice breaking with emotion, Albert turned to his wife of 54 years, Queen Paola, to say: "As for the queen who constantly supported me in my task I would simply like to tell her 'thank you'.

"A big kiss", he added as she shed a tear and the audience of political leaders and other dignitaries broke into a long round of applause.

Under sunny skies and a light summer breeze, flags fluttered across Brussels as the day of pageantry began with a thanksgiving mass in the cathedral and crowds lined outside shouted "Long Live the King".

The medieval cathedral of St Michael and St Gudula was packed with Belgian government and other dignitaries, but there were no foreign guests in attendance.

But worries persist that the shy and often awkward prince Philippe may lack the political skills of his father to maintain unity in a nation deeply divided between its Flemish and French-speaking halves.

Mathilde, an outgoing 40-year-old who will be Belgium's first home-grown queen, is seen as his best asset in the couple's campaign to win the hearts of their 11.5 million people.

"Philippe, you have the heart and the intelligence to serve our country very well," Albert said in his abdication speech. "You and your dear wife Mathilde have all our confidence."

The monarchy more often than not is viewed as a rare symbol of Belgium's unity - along with its iconic fries and the national football team.

In the last decades, severe tensions across the linguistic divide have seen it morph progressively into a federal state that devolves increasing powers to its language-based regions.

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Japan PM Abe's coalition wins upper house

THE coalition of Japan's Prime Minister Shinzo Abe won a resounding victory in upper house elections, broadcasters' exit polls showed.

The Liberal Democratic Party and its junior partner New Komeito claimed at least 71 of the 121 seats that were being contested, NHK projected, handing them control over both chambers of parliament.

Citing its own polling and interviews with voters, the state broadcaster said the governing coalition could have won as many as 80 of the seats that were up for grabs.

There are 242 seats in the upper house, half of which are elected every three years on six-year terms.

Other television stations predicted a similar margin of victory.

The projected win means Abe will face few legislative obstacles in his drive to push through painful economic reforms, including liberalising trade and raising consumption tax to begin slowing the growth of Japan's runaway national debt.

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