Worst offending companies will have to pay tax penalty from next year

The Australian Prime Minister, Julia Gillard, defended her job yesterday after newspapers reported rifts over her leadership and a failed plan on asylum seekers.

Australia's Foreign Minister will be out of action for two months while he recovers from successful open heart surgery, his cardiologist says.

The crisis in the Horn of Africa is a looming catastrophe. But it's a catastrophe the international community can avoid. If we learn lessons from the past and act fast, we can save hundreds of thousands of lives.

Australian Prime Minister Julia Gillard's unpopular leadership is facing a new problem, with speculation that the man she toppled a year ago wants his old job back.

Outlook The timing of Chinese President HuJintao's arrival at the White House yesterday was rather neat. Just as the television cameras began beaming pictures of Mr Hu glad-handing well-wishers in the White House gardens round the world, the Treasury published data that makes one wonder about the long-term relationship between the US and China – and what might happen in the financial markets should it ever deteriorate.

About 40,000 years after Aboriginal people settled in Australia, a referendum is to be held on whether to amend the constitution to recognise them as the country's original inhabitants. The move, announced by Prime Minister Julia Gillard, follows her predecessor Kevin Rudd's apology to the "Stolen Generations" of Aboriginal children forcibly removed from their families. It comes nearly 223 years after the First Fleet arrived in Sydney, heralding the colonisation of Australia by European settlers.

Australia's former prime minister Kevin Rudd was re-appointed to government as Foreign Minister, two and a half months after being removed from office by his own party.

On the face of it, the failure of the Labor Party, under the leadership of Julia Gillard, to secure victory in the Australian elections is a setback for those who argue that democratic political systems are capable of meeting the immense challenge of climate change.

The Australian opposition leader, Tony Abbott, is a keen triathlete who rarely shuns a physical challenge. Yesterday he set himself a new endurance test: to campaign for 36 hours straight in a last-ditch attempt to win government in tomorrow's federal election.

Australians go to the polls on Saturday for an election called by the Prime Minister, Julia Gillard, just two weeks after she toppled Kevin Rudd. In one way, her decision to go to the country so soon was admirable – for Britons, it underlines the opportunity missed by Gordon Brown during his honeymoon after Tony Blair's resignation. But it also reflected the same opportunistic ruthlessness Ms Gillard showed in her successful challenge to Mr Rudd. She seized the propitious moment, hoping to win a mandate for herself.

Australian labour Party strategists regard Tony Abbott – the mercurial, gaffe-prone Opposition leader – as one of their greatest assets. Indeed, as the election campaign has gathered pace here, the Prime Minister, Julia Gillard, has repeatedly sought to frighten voters by raising the spectre of Mr Abbott running the country.