You should feel sad because you could be manipulated by the words of your friend. Also being bothered by the so called "self-funded"...

Do you know who is Charles Pederson? He won the Nobel prize in Chemistry in 1987; but he did not even have a PhD.

More importantly, you should publish some papers. And hopefully, more papers than her.

You just missed the opportunity of an impressive resume which could include your help in developing the labs. It may also be possible to write papers with the engineers who support the equipment.

If your supervisor has very strong theoretical knowledge, you may also become a cheap labour... simply follow instructions for your thesis...

The question is whether they have high hope on you to develop the lab facilities, and the procedures for equipment etc... If this is the case, they are unlikely going to give you good references.

You mentioned that "Then it turned out that the lab facilities are fresh and lack expertise.. I struggled even more, preparing the way for both me and the MSc students."

But your departure may affect the MSc students!? It seems that the MSc students are dependent on you... If you leave, the MSc students' work could be delayed? This will be the havoc?

Perhaps you feel that you are kind of "cheap labour"; but you are expected to develop the lab facilities? However, if the lab facilities do not have good technical support, then this is your current challenge?
The problem could be your supervisor has scientific knowledge; but not equipment knowledge?

Just imagine that one month later, there will be a new thread in this forum: "PhD student left; lab facilities are as good as useless?"

It is possible to have good reasons to retract a paper.

One conference has overwhelming number of papers submitted, but another similar conference has comparatively lesser...
In fact, it helps to reduce the complexity in planning for one conference, and it supports the other conference which has fewer participants.

But your original idea could be leaked...

I retracted one paper recently.
However, i have a similar paper accepted by another conference.

There should be proper documentation on all the meetings with your supervisor.
Most importantly, let your supervisor know that you have proper records (e.g. shared folder).

For example, date and time of meeting, outcomes of meeting, discussions through emails...

Actually, the question could be more appropriately on the rights of postgraduate students…

For example, the right to request an Extension without the supervisor's support; right in research results and commercial exploitation; right to the Intellectual Property; right to any design produced…

However, postgraduate students could be exploited when they collected data and involved writing the paper… But the supervisor became the first author. Postgraduate students have the “right” to report certain improper or unethical practices of supervisors.

The pilot-in-command of an aircraft shall have the final authority as to the disposition of the aircraft while in command. In a sense, the supervisor is the pilot; but postgraduate student is the co-pilot who has the right to complain the pilot-in-command for violating rules… It is not right that certain supervisors bully the postgraduate students whether they have paid the tuition fees or not…

There is a shortage of cooks across Australia. Short term solution?

All authors should acknowledge the source of funding or support, instead of offering “gift authorship”.
You may refer to the guidelines in the websites below:
http://wustl.edu/policies/authorship.html
http://hms.harvard.edu/about-hms/integrity-academic-medicine/hms-policy/faculty-policies-integrity-science/authorship-guidelines
http://europepmc.org/articles/PMC2541639/pdf/bmj00468-0008.pdf

The issue is some researchers fear that future funding may not be approved.
However, not everyone accepts “gift authorship”; some may refuse their names to be included...
Why should PhD be so political? :-(

Because you mentioned earlier that your supervisor may not be very forthcoming in providing feedback on your works, it could be an opportunity to ask for comments from the “third author”.

Since he is the third author, he should be responsible for any outcome of this paper.
Be proactive. It could be a good learning experience if he shares on writing academic paper…

According to several research guidelines, gift authorship is still unethical.
There were also incidents when some so-called authors revealed that they were unaware of the publications or never read the paper.

So, you may want to let the third author read your paper.
He may say thank you, and it is ok to leave him out...
He may even spot some typos and suggest improvement on paper, say formatting etc...

This is sometimes known as "gift authorship".

One convention is to include the laboratory director, centre director, or any prominent person who could be remotely connected to the paper. This convention is not necessarily ethical unless there is substantial contribution to the publication; but many often seek to flatter the powerful or add prestige value to the authorship list.

However, it may result in unpleasantness if you disagree with your supervisor...