Pressure mounts for banker to quit

Pressure is mounting on Australian central bank board member Robert Gerard to quit after a report he had to pay A$150 million ($158 million) to settle a tax dispute.

A former Australian company watchdog chief and the opposition Labor Party both called for Gerard's resignation. Labor also tried to censure Treasurer Peter Costello in Parliament over his 2003 appointment and his refusal to fire Gerard. The motion was lost.

"For 14 years, Mr Gerard's company was in dispute with the taxation office over the fact it was using offshore tax havens to avoid paying its fair share of Australian taxes," Labor leader Kim Beazley told Parliament. "If there is the slightest skerrick of moral standards left in this place, Gerard resigns."

Gerard this week said he had no intention of quitting the board after the Australian Financial Review newspaper reported he had to pay A$150 million to settle a tax dispute after a 14-year investigation.

The AFR reported on November 29 that Gerard helped set up an insurance company in the Netherlands Antilles to avoid tax payments, citing documents from the Australian Taxation Office. The newspaper said he had to sell most of his family business, founded by his father in 1931, to France's Schneider Electric to pay the settlement.

The "confidential" settlement hadn't implied any fraud or tax evasion, Gerard said in an interview from Adelaide on November 29.

The settlement "was in fact a substantially lesser amount", Gerard said. Gerard's family business, Gerard Corp, employs 3300 people making electronics. It exports its Clipsal switches to China, Africa, the US, Southeast Asia, South America, the Middle East and Europe.

"This whole saga is damaging to the reputation of the Reserve Bank and it can be solved quickly through Mr Gerard doing the right thing and quitting," Henry Bosch, chairman of the National Companies and Securities Commission between 1985 and 1990, said in an interview from Melbourne. "This is damaging to the Reserve Bank."

Labor treasury spokesman Wayne Swan said the Reserve Bank would be "soiled" if Gerard, 60, stayed on.

Swan said in Canberra that, "He [Gerard] must do the honorable thing and quit."

Gerard's term expires in 2008. He earns between A$40,000 and A$60,000 per year for the post and donates it to charity.

According to figures from the Reserve Bank, nine board members have resigned in the past 54 years.