Morning Mail: Sydney counter-terrorism arrests, Isis hostage Kayla Mueller, Australia in Eurovision

Guardian Australia's Morning Mail Wednesday 11 February 2015 g Kayla Mueller   The family of Kayla Mueller, the 26-year-old aid worker held hostage by Isis since August 2013, has confirmed in a statement that she has been killed. “We are heartbroken to share that we’ve received confirmation that Kayla Jean Mueller, has lost her life,” her parents and brother said.Isis supporters had earlier claimed she was killed in a Jordanian air strike.  intended to avenge the burning to death of a captured Jordanian pilot. "Even in prison, one can be free" - read Kayla's letter to her family, written during her 18-month captivity. "I will not let this suffering be normal": how Kayla Mueller came to Syria's aid. Australian news and politics   Two men have been arrested in Sydney in counter-terrorism raids and are due to face court after police seized a hunting knife and flag, according to media reports.The Abbott government could be shifting ground on climate policy. Guardian Australia understands the government is preparing to make significant concessions in talks with Labor to try to strike a bipartisan deal over the RET.  Tony Abbott is backing away from controversial budget measures, but Joe Hockey is standing his ground, and says he's the "best person for the job" - follow the politics live blog now.  Crossbench senator Ricky Muir, whose vote was critical in passing a controversial asylum bill late last year, has told Guardian Australia he has concerns about the deal's progress and children in detention.  A day after the failed spill motion, Malcolm Turnbull says politicians should win the respect of the public by standing their ground and "not be bullied into an echo chamber" by the media. Mental health advocates are calling on the government not to cut funding for 150 federally-run programs on 30 June, or face an “unfolding potential catastrophe”. More than 100 federal politicians have written to the Indonesian ambassador asking that death sentences passed on Myuran Sukumaran and Andrew Chan be commuted Around the world Malaysia’s highest court has upheld a five-year prison sentence for opposition leader Anwar Ibrahim on a sodomy charge the opposition figure has consistently maintained was politically motivated Rolling coverage of the Greek debt crisis, as markets welcome signs that Athens will compromise at the eurogroup meeting. A French clinic has been ordered to pay a total of€1.8m ($2.6m) compensation to swapped babies – now adult women – and their to parents after they were switched at birth 20 years ago. A Cairo appeals judge has condemned last year’s trial of three al-Jazeera English journalists, saying there is no evidence they helped the Muslim Brotherhood. Chinese inflation falls to 0.8%, fuelling fears of deflationary spiral driven by weak demand, property downturn and falling oil prices One last thing   For the first time in the history of the Eurovision Song Contest, Australia will be allowed to compete as part of 60th-anniversary celebrations – with the chance to return if we win. This is very exciting news, so naturally we are live blogging it. Have an excellent day – and if you spot something I've missed, let me know on Twitter @earleyedition.