Koreas hold fresh talks on fate of Kaesong

THE two Koreas have held fresh talks on reopening a joint industrial estate, ahead of South Korea-US military exercises next week that the North says are a rehearsal for war.

The two sides have already met for six rounds of fruitless discussions on the future of the estate in Kaesong, which was effectively shut down by North Korea in April as military tensions soared on the divided peninsula.

With South Korea starting an annual military drill with the United States on Monday, the result of the latest negotiations could determine whether the peninsula is sucked into another dangerous cycle of escalating hostilities.

"The fact we are sitting here for the seventh round shows that the issue is not an easy one to solve," the South's chief delegate Kim Ki-woong told his North Korean counterpart Pak Chol-su on Wednesday as the talks began in Kaesong, 10km inside the North Korean border.

Pak likened the negotiations to farming and said the recent break in an extended heatwave on the peninsula boded well.

"With the weather so good, I think we can tend the field well and can possibly reap good produce," Pak said, according to a pool report.

An association representing the owners of the 123 South Korean companies in Kaesong said on Tuesday that the time had come to make a lasting deal on resuming operations.

"This time, our government and the North's authorities must reach agreement on reopening Kaesong without fail," it said in a statement.

The North had proposed the seventh round of talks last week, just hours after Seoul announced it was going to start compensation payments totalling $US250 million ($A276.01 million) to businesses affected by Kaesong's closure.

The payout move was widely seen as the first step towards a permanent withdrawal from the zone.

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Abbott dismisses Labor GST scare

OPPOSITION Leader Tony Abbott says Labor's scaring the "bejesus" out of voters over the coalition's tax plans but the prime minister's not letting the issue go.

Labor's claim that the opposition is planning to raise the 10 per cent GST or broaden it to food has dominated the first nine days of the election campaign.

It's trying to use the debate to gain the edge on the coalition, which is leading 51-49 per cent in two-party terms according to the latest Essential poll.

Mr Abbott campaigned in western Sydney and stressed again that the GST wouldn't change under his government.

"Grow up, get real, the GST is not going to change, full stop, end of story," Mr Abbott said on Tuesday.

"Let's not play these sorts of games, we all know this is a desperate Labor party that is running around trying to scare the bejesus out of people."

Kevin Rudd, who was campaigning in Townsville, said Mr Abbott was in damage control over his planned tax review.

"My challenge is simply this ... if you are not planning the possibility of increasing the GST or extending it to food then just rule it out," the prime minister said.

"But the fact that you won't rule it out and are insisting it's part of the review I think says it all."

Mr Abbott couldn't rule out participants to the review making references to the consumption tax.

The GST rumble continued as the departments of Treasury and Finance released the final pre-election set of budget and economic projects, igniting a fresh spat over the coalition's policy costings.

The Pre-Election Economic and Fiscal Outlook (PEFO), which parties use as the base for their costings, confirmed the government's own forecasts including a deficit of $30.1 billion this financial year.

Mr Rudd said it was "D-Day" for the coalition to announce its own budget bottom line.

"It's fundamental for the Australian people to know where Mr Abbott's $70 billion worth of cuts to health, education and jobs are going to fall," he said.

The opposition denies the $70 billion figure and suggestions of cuts to health and education.

It gave no specific time frame for its costings release, saying only that it would be well before the election and follow careful consideration of the PEFO numbers.

Mr Rudd used his north Queensland visit to announce $30 million to train and improve the skills of 5800 workers in sectors like child care, aged care and disability services.

Mr Abbott announced $100 million for up to 250 mobile-phone towers to fix communications black spots, particularly in regional areas.

Meanwhile, the major parties are bickering over follow-ups to Sunday's leaders debate, narrowly won by Mr Rudd.

The Liberals want two town hall-style forums in Brisbane and Sydney, which would be hosted by Sky News and made available to all TV networks.

Mr Abbott said journalists had enough opportunity to ask questions.

"It's time for the people to have a go," he said.

Labor wants a Sunday night event hosted by Seven and a breakfast debate hosted by Nine, both of which would involve social media platforms like Twitter.

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Floods in Nepal kill seven

A FLOODED river has swept away part of a small village in northeastern Nepal, killing seven people, a local police official says.

Heavy rain overnight swelled the river, which washed away four houses in the village in Ramechhap district while people were sleeping, police official Bimal Raj Kandel said on Tuesday.

Six people were also injured and one person reported missing, Kandel told AFP.

Efforts to reach the village were being hampered by flooding elsewhere in the district, he said.

"Another river ... also damaged yet another highway bridge, which has hampered our rescue efforts," Kandel said.

On August 5, six Hindu pilgrims drowned while trying to cross a swollen river in the same district. Pilgrimages to remote temples in the mountains are popular in Nepal at this time of year.

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Holden workers vote for pay freeze

Holden workers in Adelaide have voted in favour of a new enterprise agreement. Source: AAP

HOLDEN workers in Adelaide have voted in favour of a new enterprise agreement that could save the car maker's Australian operations.

About 1500 staff at the Elizabeth assembly plant cast their votes on Tuesday backing their revised agreement which includes forgoing pay increases in a bid to save the company $15 million a year in labour costs.

Without the savings, and without ongoing financial assistance from the federal and state governments, Holden has indicated its local manufacturing operations will close, probably in 2016.

Australian Manufacturing Workers Union state secretary John Camillo says the vote was decisive but has declined to release the numbers.

The new agreement does not include the 10 per cent pay cut the company initially called for, though a three per cent increase scheduled for November will be cancelled.

It will also cap redundancy payments for new staff and provide for new shift arrangements.

For the new agreement to come into force Holden workers in Melbourne will also be asked to vote in favour later this week.

But as the changes will not apply to them and most are expected to abstain, allowing the Adelaide vote to stand.

The new deal is also conditional on Holden committing $1 billion to design and build two new cars in Australia from 2016.

A Holden spokesman said no comment could be made until after the vote was finalised in Victoria.

"The vote is taking place across several sites over four days, in both South Australia and Victoria," he said.

"We have a voting process in place that we are following and plan to announce the final results on Friday afternoon, August 16."

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WA Libs backflip over unpopular power plan

WEST Australian Premier Colin Barnett has denied his backflip over an unpopular state budget cost savings measure was due to pressure from a "grumpy" federal Liberal MP.

The Liberal leader says he was not pushed into abandoning the plan to slash the solar feed-in tariff rate for households that funnel surplus power back into the grid from 40c per kilowatt hour to 20c/kWh.

The move was expected to save $51 million but was abandoned four days after being announced in last Thursday's budget following a huge public backlash and from within the state Liberal party.

It flew in the face of a 2011 letter from power utility Synergy that said the 40c/kWh rate was locked in for 10 years.

"I was not prevailed on," Mr Barnett told reporters.

"I received one fairly grumpy message from one federal member - that was it."

Asked who sent the message, the Premier responded: "You can do your own research".

Mr Barnett was repentant and accepted the government has egg on its face, saying he was conscious of the backlash.

"You can't ignore it. There's an election on and it's never good to have a controversy during an election campaign.

"I apologise. I'm sorry this happened.

"It was a mistake, we accept that, we've reversed the decision and I guess we move on from there."

Mr Barnett said the decision to reverse the plan was made with householders' hip pockets in mind.

"It was the impact that it had on individual people, many of them retired who had in good faith used their savings, their superannuation or borrowed money to enter into a scheme."

In response to the threat of a class action by householders, Treasurer Troy Buswell on Friday said the tariff cut was "allowable within the constraints of the contracts".

But Mr Barnett said people had signed up to the solar scheme not realising there was "room to alter the contract".

At the same time, the scheme was too generous at 40c/kWh, making it "unfair" for other electricity users.

Energy Minister Mike Nahan said it was a tough budget and the Treasurer had to cut costs in the electricity system, but the government "went too far".

"We learned the lesson, we backed off of it," Mr Nahan said.

"I'm not embarrassed."

Mr Nahan denied Mr Buswell - who had only moments earlier told journalists there was no chance the decision would be reversed - was "rolled" in cabinet.

The program, introduced in 2009, was such a success the Liberal government admitted in 2011 the take-up cap had been breached, costing it some $46 million more than planned.

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Rudd shrugs off bad polls for Labor

PRIME Minister Kevin Rudd is unfazed by Labor trailing the coalition in the polls four weeks out from the federal election and his colleagues deny Labor's campaign is faltering.

Labor said a poor poll on Monday simply showed there was long way to go before the election, as they continued to try and flush out coalition policy costings.

An average of the most recent four polls by Newspoll, Morgan, ReachTEL and Essential shows Labor's two-party vote on 48.2 per cent - the lowest level since Mr Rudd's return to the leadership.

Campaigning in the Sydney seat of Bennelong, Mr Rudd said Labor remained the underdog.

"I'm a positive sort of guy with a positive set of plans for the country's future and I'm not fazed by any of this," he said.

"I've been around for a bit and I've been around for a few things somewhat more challenging than this."

He was at Macquarie University to announce $35.6 million for retraining 7000 manufacturing workers and a new medical technology partnership.

He followed up his election debate announcement of Labor's support for a new bill on gay marriage with a call on Opposition Leader Tony Abbott to allow his MPs a conscience vote.

"I think it's time we resolved this matter for all Australians," Mr Rudd said.

Mr Abbott, whose sister Christine Forster is gay, said the issue was important.

But not as urgent a priority for an incoming coalition government as jobs and the cost of living, he said.

Campaigning in Melbourne, Mr Abbott promised an annual statement to parliament on the progress of major projects.

"I would like to think that should we win the election I will be known as an infrastructure prime minister," he said.

Labor and the coalition continued to exchange blows over the costing of policies, ahead of Tuesday's release by Treasury of the Pre-Election Economic and Fiscal Outlook.

Labor released its economic statement on August 2, which Mr Rudd said was based on the government's "best analysis" of the latest data.

He says he will account for policies announced during the election campaign with a "full reconciliation of the costings on the way through".

Opposition finance spokesman Andrew Robb said Mr Rudd's comment showed the hypocrisy of Labor's call for the coalition to immediately release its policy costings.

"When exactly will the Australian people see the full list of all of your costings, Mr Rudd?" Mr Robb said.

Following Sunday's leaders' debate, talks are under way to hold two town hall-style events in Brisbane and Sydney in coming weeks.

Meanwhile, the Labor national executive endorsed business consultant Clare O'Neil to replace Geoff Lake as the candidate for the safe Victorian seat of Hotham.

Mr Lake was stood aside over comments he made about a female Monash councillor 11 years ago.

The ALP is seeking a replacement for Senator David Feeney, who formally resigned from the Senate on Monday to run in the Victorian lower house seat of Batman.

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Rudd says he didn't know debate rule

The coalition has accused PM Kevin Rudd of cheating in the first leaders' debate. Source: AAP

PRIME Minister Kevin Rudd insists he didn't know he'd be breaking the rules by using notes in the leaders' debate - and he's done it before.

Opposition Leader Tony Abbott was told it was against the rules and thought it odd when his opponent arrived with a stack of notes and seemed to be reading from them at the open and close.

"My problem was not that Mr Rudd used notes but what he used wasn't worth reading in the first place," Mr Abbott told Fairfax radio in Melbourne.

Mr Rudd says he was not advised about the rule and had acted in good faith.

"If someone had said to me it was not proper to take notes along to a debate, then, sure, that's fine. I was in receipt of no such advice," Mr Rudd told reporters in Sydney on Monday.

Mr Rudd pointed out it would have been odd for him to go on a platform watched by millions thinking he could do something "on the sly".

"You can't. So I acted in good faith and everyone would accept that," he said.

The debate rules signed off by both parties stated the leaders could have a pen and paper but "no other documentation or props."

A spokeswoman for Mr Rudd on Sunday said there'd been no intention of not complying with the rules.

"We have always believed this rule is aimed at preventing the use of props," the spokeswoman said.

Mr Rudd also used notes when he debated John Howard in 2007 and regularly uses them for media appearances.

The prime minister says that's because he prefers to be as accurate as he can.

"There's a limit to how much you can scribble down on the palm of your hand," he said.

"There's a limit to how many of Mr Abbott's three-word slogans you can actually get there to remember them all."

Mr Abbott was asked on Monday to promise the next debate would be less boring.

"I thought every minute was full of excitement," he quipped.

He was in the minority.

OzTam says the most watched program on Sunday night was Seven News with 1.34 million viewers.

The debate on ABC 1 came in at 12th place with 708,000 viewers.

The Nine Network reported that Tony Abbott used notes in his debate against Julia Gillard in the last federal election campaign - when the debate rules were the same as on Sunday.

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Abbott in surplus budget pledge

Opposition Leader Tony Abbott says he's looking forward a television debate against PM Kevin Rudd. Source: AAP

BUDGIE smugglers are out, for now, but a budget surplus will be in, Tony Abbott promises.

Mr Abbott joined 85,000 others on the road between Sydney's CBD and Bondi Beach on Sunday, running with blind athlete Nathan Johnstone in the 14-kilometre City2Surf fun run.

But the Opposition Leader said joining in the run on the morning of his debate with prime minister Kevin Rudd wasn't a big shift from his usual morning routine.

"I could either run around the back blocks of Forestville or I could be out with 80,000 of my fellow Australians," he told Macquarie Radio.

Running to raise money for motor neurone disease research, Mr Abbott finished in a respectable time of one hour, 21 minutes and 16 seconds.

Earlier on day seven of the campaign, Mr Abbott and Liberal frontbencher Malcolm Turnbull announced a $15 million boost for surf clubs and a new policy to deal with drowning black spots.

Asked if he had considered making the announcement in his budgie smugglers, Mr Abbott, a surf lifesaver himself, laughed and said: "Election campaigns should be budgie-smuggler-free zones.

"You won't see me in budgies this side of polling day."

Mr Abbott also said a coalition government would return the budget to surplus in its first term, provided the Labor government's budget figures - which will get another going over in Tuesday's Pre-Election Economic and Fiscal Outlook - were correct.

"If the budget figures that the government has so far put out are correct, yes (there will be a surplus in the first term)," he said.

"But we can't guarantee what the starting point is."

He said the coalition's costings would be announced well before election day on September 7.

Labor was yet to release its full list of costings and had failed to deliver any of its promised surpluses to date, Mr Abbott added.

Mr Abbott left Sydney for Canberra to take part in the first debate of the election campaign against the prime minister.

"I'm looking forward to it because it's both of our chances to present directly to the Australian people what are our positive plans for the future," Mr Abbott said.

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Abbott must come clean on costings: PM

Kevin Rudd (pic) says Tony Abbott must outline the coalition's costings at the leaders' debate. Source: AAP

PRIME Minister Kevin Rudd has challenged Tony Abbott to stop being evasive on the coalition's costings when the pair meet for the first leaders' debate on Sunday night.

During a visit to Queanbeyan, Mr Rudd said he was "delighted about the opportunity to debate Australia's future", and claimed it was time the opposition leader levelled with the public about his plans for the budget.

Labor is trailing the coalition according to a host of polls up published over the weekend and it is critical Mr Rudd wins the National Press Club debate if he is to reclaim some of the momentum lost during the first week of the election campaign.

Mr Rudd told reporters "you can be evasive up to a certain point, I suppose" but not during the national televised debate.

"Based on today's polls if there was an election yesterday Mr Abbott would be prime minister today and therefore he can't be evasive tonight about where his $70 billion in cuts in heath, education and jobs will fall," he said.

"I think it is a pretty basic expectation of Mr Abbott."

Mr Abbott began his day ahead of the debate running in Sydney's iconic City2Surf.

Asked how he prepared for their first showdown, Mr Rudd said he had sought "a bit of divine solace" on his regular Sunday morning visit to church.

Mr Rudd said he started the day with a long walk with son Nicholas, managing to escape the TV cameras.

"I had peace and equanimity," he said.

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SA cops hopeful baby safe with fleeing dad

POLICE searching for a South Australian man who absconded with his infant daughter after allegedly assaulting a family member say they believe he has no intention of harming the child.

Benjamin Koch, 38, took nappies and baby formula when he fled with his 10-month-old following an incident in the state's east about 3am (CST) on Sunday morning.

Police are also investigating an alleged assault after paramedics transported a 52-year-old woman with head injuries to Flinders Medical Centre.

Superintendent Trevor Twilley said the fact that Mr Koch took provisions was a good sign, but he urged the father to make contact the child's mother.

"Anybody's that a parent would understand the trauma that (the mother) must be going through not only with concerns about the injuries to her mother but also not knowing the location of her 10-month child," Supt Twilley told the Nine network.

"The gentleman did take with him some nappies and formula which from our perspective is very pleasing and would indicate there's no intent to harm the child."

South Australia police said there were no court orders preventing Mr Koch from having access to the child, but are concerned for the welfare of both him and the baby.

They say Mr Koch may be distressed.

Mr Koch is about 175cm tall, with a slim build with blond hair.

He is driving a silver 2004 Mitsubishi sedan, with South Australian registration XFC571.

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