Tax scandal hits Australia

Australia's attorney general and its treasurer refused to resign despite an official report saying hundreds of millions of dollars in taxes had been lost through incompetence and deception by public servants.

The scandal was revealed Tuesday in the findings of a royal commission investigation of a waterfront trade union. Royal Commissioner Frank Costigan said his probe into tax evasion by union members uncovered a major fraud between 1973 and 1980 involving thousands of companies avoiding taxes by asset-stripping schemes. He said the Australian Taxation Office had detected the tax-evasion schemes in 1973, but had taken no action. The report also said a senior government legal officer had been involved in organized prostitution and tax evasion.

Attorney General Peter Durack, defying calls for his resignation by the opposition Labor Party, said that under the Australian system ministers did not step down unless there had been some personal failing. Mr. Durack said a special prosecutor and a task force of lawyers, taxation officers, and police would be appointed to crack down on the tax-avoidance schemes. Treasurer John Howard took the same tack, saying he had not known about the problem until very recently.