Tassie freight schemes need change: report

TASMANIA'S freight headache looks set to continue with a Productivity Commission report finding the island state requires ongoing and improved support to maintain viable links to mainland Australia and international ports.

The draft report released on Friday recommends updates to current arrangements, which see the federal government subsidise goods and passenger services to help offset the cost disadvantage of Bass Strait.

"The design and administration of the current subsidy schemes are out-dated, resulting in outcomes not well-aligned with the schemes' underlying objectives," Commissioner Karen Chester said.

"The embedded administrative complexity also gives rise to anomalies and some perverse incentives."

Without change, the federal government will pay $2 billion over the next 15 years to fund the schemes.

There is a risk that subsidy recipients will become reliant on the funds, which will subsequently reduce the productivity of the Tasmanian economy, the report said.

The commission recommends the schemes are regularly and independently reviewed.

After a period of public consultation the report - titled Tasmanian Shipping and Freight - will be submitted to the Australian government in March.

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Afghan boys playing volleyball shot dead

AT least five boys have been shot dead after a group of militants attacked them on a volleyball court in eastern Afghanistan.

"The young boys, who were school students, were playing volleyball in a village in Alingar district at 12.30pm ... a group of gunmen from the nearby village came and shot them," Sarhdai Zwak, a spokesman for the provincial governor of Laghman, said on Thursday.

"The shooters, who are surely members of the armed opposition, fled the area," Zwak said, implying the attack was carried out by Taliban militants.

"It is not clear yet why they shot dead the boys, but it is clear that the enemies of Afghans cannot tolerate our sports achievements. So, they restore cowardly attacks."

Last week, four young footballers were killed in the southern province of Kandahar when a rocket, allegedly fired by Taliban militants, struck the football field.

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Confidence climbs among mid-size firms

BUSINESSES expect a better trading year in 2014 amid strong profits and a reduction in operating costs.

The Commonwealth Bank future business index, which gauges the sentiment of mid-size businesses with a turnover of $10 million to $100 million, suggests businesses are experiencing a sharp increase in confidence.

The index was 17 points in the December quarter, its highest level since the survey began in September 2011, and up from 10.8 points in the previous three months.

"The vast majority of businesses are anticipating a more prosperous year ahead," said the bank's general manager for corporate financial services, Michael Cant, when the report was released on Thursday.

"Notwithstanding the buoyant sentiment ... there remains a level of conservatism as businesses continue to focus on managing costs."

The survey found the top three challenges facing business are weak consumer confidence, a falling Australian dollar and uncertainty about government policy decisions.

There are also increasing concerns about skills shortages.

However, 77 per cent of organisations expect a better performance in 2014 compared with 2013.

The survey's revenue index for the next six months jumped to 41 points in the December quarter from 25 in the September quarter, the profit forecasts index increased to 27 from 15, and the operating costs index eased to 29 from 33.

Commonwealth Bank chief economist Michael Blythe said the sharp improvement in revenue and profit expectations was quite encouraging.

"We're seeing this improved sentiment flow through to other important areas, such as an enhanced appetite for risk and an expected increase in capital expenditure and headcount," he said.

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German index suggests ongoing upswing

A WIDELY followed index of German business optimism dipped unexpectedly in January but remained at a high level, suggesting an ongoing upswing in Europe's largest economy.

The index published on Tuesday by the ZEW, or Centre for European Economic Research, eased to 61.7 points from 62 in December. Market analysts had expected a rise to 64.

The ZEW said the index, despite its small drop, was "hovering at a high level" well above its long-term average of 24.4 points.

ZEW President Clemens Fuest said the figure confirmed expectations for an economic upswing among the financial market experts who were surveyed.

Germany's economy expanded only 0.4 per cent in 2013 but stronger growth is expected this year as the country's eurozone trade partners slowly put their financial crises behind them.

Jonathan Loynes, chief European economist at Capital Economics in London, said that "the optimistic tone of the survey supports our expectation that Germany will record relatively solid growth of about 1.5 per cent in 2014".

He cautioned that "even the super-competitive German economy" could suffer from a stronger euro that could hold back exports.

Selling cars and industrial machinery abroad is a pillar of Germany's economy, which has low unemployment and a strong trade surplus.

The index is based on a survey made January 6-20 of 254 investment analysts.

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Vic ambos to protest over pay dispute

HUNDREDS of paramedics are expected to converge on the Ambulance Victoria headquarters on Wednesday morning over their industrial dispute.

Ambulance Employees Australia Victorian secretary Steve McGhie said that during last week's heatwave ambulance services went into "meltdown" and highlighted the inadequacy of resources.

"Even during relatively quiet times, Victoria's ambulance service is woefully inadequate," Mr McGhie said.

"However, last week the system went into meltdown."

A spokesman for Health Minister David Davis said the government inherited an ambulance system in crisis and since coming into office had injected millions to recruit more paramedics in an historic expansion of the state's ambulance services.

Ambulance Victoria chief executive Greg Sassella said it had been negotiating in good faith to reach a meaningful enterprise agreement and wage increase outcome.

He said they remained in voluntary conciliation with the unions and their next meeting was scheduled for the end of this month.

The ambulance union says its paramedics are the lowest paid in Australia and they could go interstate and earn almost $30,000 more for doing the same job.

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Fire at Vic jail puts inmates in lockdown

PRISONERS were placed in lockdown during a fire at a minimum security prison north of Melbourne.

Prisoners were not in danger at the Dhurringile Prison, in Murchison, a Victoria Police spokeswoman said.

The fire is believed to have started at a factory on the prison grounds just after 8pm (AEDT) on Tuesday.

A Country Fire Authority spokeswoman said the fire was causing a bit of smoke, but was not a threat to the community.

About 19 fire trucks battled the blaze and it was brought under control about 10pm.

The cause for the fire is not known at this stage.

The minimum security prison has a capacity for 268 prisoners.

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Shorten warns against rubber stamp to cuts

OPPOSITION Leader Bill Shorten will seek to energise Queensland Labor supporters and urge them to make sure the by-election in Kevin Rudd's electorate doesn't lead to a rubber stamp for budget cuts.

Mr Shorten is campaigning in the Brisbane electorate of Griffith ahead of the February 8 by-election triggered by Mr Rudd's resignation.

He will formally launch ALP candidate Terri Butler's campaign on Wednesday evening.

The opposition leader intends to reiterate warnings the cuts of Campbell Newman's state government were just a curtain-raiser for what Prime Minister Tony Abbott has in store.

"The people of Griffith can't afford to elect a rubber-stamp for the cruel cuts of the Abbott government," he will tell supporters at the Morningside Panthers Football Club.

"Tell your friends and family and colleagues and fellow commuters that there's only one candidate who will be a strong voice for the real needs of the people of the south side."

Mr Shorten believes the by-election will be a close competition, with the Liberal-National Party spending plenty of money to support its candidate, Dr Bill Glasson.

Dr Glasson ran against Mr Rudd in the September federal election, garnering a swing away from the former prime minister of nearly 5.5 points.

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Credit demand subdued other than for homes

DEMAND for home loans is at its highest level in four years but consumers appear to be shying away from other forms of debt, faced with the spectre of rising unemployment.

Data from credit information provider Veda found that mortgage inquiries surged 15.3 per cent over 2013 compared with a year earlier although overall credit demand increased by just 0.4 per cent.

Veda's general manager of consumer risk, Angus Luffman, says an extended period of low interest rates is supporting a lift in mortgage inquiries, showing the strongest growth since late 2009.

"It is likely that we will see a continuing increase in the near term, along with sustained house price growth," Mr Luffman said on Tuesday.

In contrast, inquiries for credit cards rose just 2.4 per cent last year, while demand for personal loans fell 1.4 per cent.

Mr Luffman said the December quarter was usually a strong period for credit demand, reflecting increased spending for Christmas.

"The relatively weak outcome in loans and credit cards suggests low interest rates are not leading to a significant lift in consumer borrowing as households remain cautious about rising unemployment," he said.

It is also a reflection of a slowdown in car sales, which barely grew in 2013.

Mr Luffman believes slow credit demand suggests retailers face continuing challenges for big ticket sales.

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ANZ's satisfaction ratings rebounds

ANZ lifted its standing significantly among business customers in the second half of 2013, to leapfrog rivals NAB and ANZ in satisfaction ratings.

The latest DBM Consultants Business Financial Services Monitor (BFSM) shows ANZ in second place among with big four with an average business customer satisfaction rating of 7.4 out of 10.

That's a significant move from the 6.9 out of 10 ANZ scored in May last year, when it lagged behind its big four counterparts.

DBM director Maria Claridad said most of the improvement in ANZ's rating had come in the micro-business segment, which includes businesses with an annual turnover of up to $1 million.

"This makes up the majority of Australian businesses by number, and ANZ's increase (among micro businesses) over the year is the biggest increase of any bank in any segment," she said.

The BFSM, which surveys 20,000 businesses, showed the Commonwealth Bank in top place again with an average rating of 7.5 out of 10.

Meanwhile, Westpac had an average rating of 7.3, down slightly from a month earlier and NAB, Australia's biggest business lender, remained in fourth place at 7.0.

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Oxfam calls for tax haven crack down

EDS: Not for use before 0001 AEDT Monday January 20.

CANBERRA, Jan 20 AAP - Oxfam wants Prime Minister Tony Abbott to align himself with the 99 per cent and call for a crack down on tax havens at the World Economic Forum.

The organisation has released a discussion paper showing economic inequality increasing with almost half the world's wealth now in the hands of just one per cent of its population.

The poorest half of the world's population own the same amount as the richest 85 people.

Mr Abbott will address to the World Economic Forum in Switzerland on Thursday and is expected to outline where he plans to take Australia as a global economic player.

Oxfam is urging all gathered at the forum to support progressive taxation regimes and crack down on tax havens.

"Tony Abbott is in a prime position to help reduce extreme inequality and poverty globally as Australia prepares to host the leaders of G20 nations this year," Oxfam Australia chief executive Helen Szoke said in a statement.

She called on the government to introduce rules requiring Australian mining and energy companies to disclose the payments they make to governments in other countries, a move to help stamp out corruption.

Oxfam says the rising concentration of wealth represents a global threat to stable and inclusive societies.

"In developed and developing countries alike, the lowest tax rates, the best health and education and the opportunity to influence are being given to the rich and their children," Dr Szoke said.

A network of tax havens allowed the richest individuals and companies to hide trillions of dollars from tax collectors.

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