Australian treasurer rejects 'absurd' resignation call

Australia's Treasurer Wayne Swan dismissed calls for his resignation over allegations he abused his power Sunday, as Prime Minister Kevin Rudd demanded the opposition produce proof to back its claims.

Opposition leader Malcolm Turnbull has accused Swan of improperly using his position to try to secure a government loan for a car dealer friend of the prime minister then misleading parliament about his actions.

Turnbull has called for Swan's immediate resignation over an affair that has snowballed into the worst scandal to hit Rudd's centre-left Labor government since it was elected just over 18 months ago.

But Swan has accused Turnbull of peddling "baseless allegations" and scoffed at suggestions his future was on the line and he may be forced to resign.

"I regard that... as completely ridiculous, even absurd," he told Nine Network television.

Rudd, who has also faced calls to quit from Turnbull, leapt to his treasurer's defence, saying the opposition leader must either produce solid evidence before parliament resumes sitting Monday or tender his own resignation.

Rudd challenged Turnbull to supply an email central to the allegations. It was purportedly sent from the prime minister's office to a treasury official and sought favourable treatment for the car dealer, John Grant.

"Mr. Turnbull therefore has the clock ticking in providing to the parliament for authentication the email upon which his entire case against myself, the treasurer and the government is based," Rudd told reporters.

"Mr. Turnbull and the Liberals have been boasting for a long time now that they are in possession of this information. Well the time has come to produce this information to the parliament for authentication."

A senior treasury official told a parliamentary committee Friday he thought he had received the email from Rudd's office asking him to look into funding for Grant, but could not be sure.

The government contends the email does not exist and Rudd on Saturday called in police to investigate whether someone had faked the document in an attempt to discredit his government.

Rudd has also ordered the auditor general to investigate any communications between his office and the treasury over Grant's loan application.

Grant, a former neighbour of the prime minister who also provided a pick-up truck for use by Rudd's campaign, was seeking access to the two billion Australian dollar (1.6 billion US) "OzCar" fund for struggling car sellers.

Rudd told parliament this month that neither he nor his office lobbied the treasury on behalf of the car dealer.

Swan told parliament his office simply passed on representations on behalf of Grant but he did not know the outcome of the correspondence and never tried to influence any decision.

However, documents released by the government show Swan received updates on the "OzCar" fund on his home fax which included information on Grant's application.

Swan maintained Sunday that Grant did not receive special attention and the faxes to his home showed he was closely monitoring the situation facing the Australian auto industry.

He also pointed out that Grant received no OzCar grant.

Turnbull said he had never claimed to possess the email at the centre of the allegations and the government's demand that he produce it was a diversionary tactic designed to take pressure off Swan.

"What Mr. Rudd is doing is seeking to use the matter of this email to distract the attention of the Australian people from the fact that his treasurer had unquestionably misled parliament," he told reporters.

Ruud and Swan received backing Sunday from the motor industry.

Michael Delaney, executive director of the Motor Traders Association of Australia (MTAA), said: "The treatment that Mr. Grant, a member of mine, got was no different from the treatment all my other members got," Delaney told Ten Network television on Sunday.