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Australian PM and treasurer reject calls to quit

Australia's Prime Minister Kevin Rudd and his treasurer are rejecting opposition calls to resign over their relationship with a car dealer which commentators say has created the 19-month-old government's biggest political crisis.

world Updated: Jun 21, 2009 12:29 IST

Australia's Prime Minister Kevin Rudd and his treasurer are rejecting opposition calls to resign over their relationship with a car dealer which commentators say has created the 19-month-old government's biggest political crisis.

Opposition Leader Malcolm Turnbull said Saturday that Rudd and Treasurer Wayne Swan repeatedly misled Parliament this month when they denied that Rudd's friend, car dealer John Grant, had been given special attention when he applied for a government loan to cope with the global credit crunch.

Turnbull said Rudd and Swan had no choice but to resign. Swan said Sunday he would not.
Rudd maintains that he did not mislead Parliament and said Saturday that Swan had "acted entirely appropriately."

The accusation that the government does favors for its political friends is damaging for Rudd, who is halfway through his first three-year term.

The controversy will likely dominate Parliament when it resumes Monday for a final week before a six-week break.

Turnbull cited an e-mail published in News Corporation newspapers in Australia on Saturday that was purportedly a request by a Rudd staffer in February for Treasury officials to give priority to Grant's credit request.