THE NEWS WRAP: Treasury admits budget errors but downplays recession fears

Treasury secretary Martin Parkinson has sought to allay fears that parts of the Australian economy are on the brink of recession as the economy shifts during a Senate estimates hearing.

“We cautioned that this transition would not necessarily be smooth. It has been the case that over the last half decade or so, the vast bulk of GDP growth has been sourced out of the mining and mining-related sectors … and the non-mining parts of the economy have been experiencing very sluggish growth,” Parkinson said.

However, Parkinson has admitted Treasury might have been overly optimistic about commodities prices while putting together the federal budget.

“Commodity prices have moved significantly over the course of the last six months. Should we respond to what’s happened in the last week and override where we were? We chose to sit and I take full responsibility for that. With hindsight, I would have been better off jumping in the other direction,” he said.

Volkswagen announces support hotline but no recalls

Volkswagen’s Australian general manager John White has announced a new support line for people concerned with potential safety faults with their vehicles and a campaign to contact affected owners, but stopped short of announcing a recall over engine faults.

“Are we going to be able to fix every customer, I’m not sure I can promise that but we’re going to get to every customer. We’re going to get legitimate issues, we’ll do everything we can to repair the issue. Safety, it’s a top priority,” White said.

Concerned Volkswagen owners can email the company at vgasupport@volkswagen.com.au or phone the hotline on 1800 504 076.

Clive Palmer fights $90 million tax bill

Mining tycoon and prime ministerial aspirant Clive Palmer is challenging a $90 million tax bill in the Federal Court.

Palmer claims his private company, Mineralogy, overstated capital gains it originally declared from the sale of mining rights held by a subsidiary called Sino Iron to a Chinese-based company called Citic Pacific.

Overnight

The Dow Jones Industrial Average is up 0.5% to 15040.6. The Aussie dollar is up to US96.16 cents.