Interview: Machine Man
Unions: Testing Times
Bad Boss: Freespirit Haunts Internet
Unions: Badge of Honour
National Focus: Noel's World
Economics: Safe Refuge
International: Global Abuse
History: The Honeypot
Review: Death And The Barbarians
Poetry: Who Wants to be a Millionaire?
The Mouse That Roars
Justice For Victims Denied
Labor Council of NSW
Stilwell found that they had a positive impact on the social and economic life of the region, and on the national economy. Molly and Mubarak are not an isolated case of social coheshion, but on that is writ large over the Young community.
Starting in mid 2001, Afghan refugees came to Young to work in the local meatworks. From an initial two dozen their numbers swelled to a peak of nearly ninety in late 2001 and early 2002. The closure of the nightshift at the meatworks in April 2002 precipitated a decline, and at the start of 2003, when this study was undertaken, about 45 Afghan refugees remain. All are male, mostly aged between 20 and 40, and typically holding Temporary Protection Visas which give them the right to live and work in the country for three years. Some have left because their visas have expired and most of the others will expire during 2004, although appeals procedures can extend the period of temporary residency. The Federal government is actively encouraging all the Afghans in Australia holding Temporary Protection Visas to leave the country. It offered $2000 to each refugee who elected to return to Afghanistan by June 2003.
All the Afghan refugees coming to Young are Hosara people, an ethnic minority which has been subject to discrimination in Afghanistan long before the Taliban regime came to power. They have fled appalling treatment of themselves and their families, seeking refuge in a safe country and the opportunity to work, hoping in most cases to establish a case for permanent settlement and family reunion.
Have the Afghan refugees been good for Young? Local opinions vary, but the dominant view seems to be that their contribution as workers has been valuable and that no significant social problems have arisen.
Evidence from the police, local businesspeople, rental agents and neighbours confirms this. The experiment has been shown to work. However, there have been attempts to foster more negative responses. According to the Sun Herald newspaper of 12. 5. 2002, one resident drew up a petition asking people to register their disagreement with what were described as 'illegal asylum seekers' being employed in the town, but there is no evidence that any such petition was presented to the Shire Council. The Sydney- based 'Australia First Party' circulated a leaflet in town headed 'How Can Ordinary Australians Fight this Blight on the Future of Young', warning of 'rape- gangs, shootings of police officers, drugs, muggings, house- breakings, murder and unemployment' (as reported in the Sydney Morning Herald, 14. 9. 2002). This circular created widespread concern among citizens concerned about the fuelling of racism and more willing to embrace the positive aspects of having the Afghans in town. To elicit a more balanced response, the Mayor of Young Shire Council invited all local citizens to put their views in writing, compiling them into a loose- leaf book at the Council offices. Of the 119 responses, about half were critical of the Afghan presence, half were supportive and just 4 were undecided or seeking further information. The favourable views were typically expressed at greater length and with greater sophistication of language than the critical views.
The Mayor and fellow councillors have been publicly supportive of the presence of the Afghans living and working in town. However, a letter written by the Mayor to the Federal Immigration Minister, Neil Ruddock, in March 2002, suggesting that the Afghan refugees employed at the meatworks in Young should be considered for permanent residency in Australia, met a negative response from the Minister. The Minister's written reply reaffirmed the policy that: 'TPV holders are granted interim protection in Australia for three years. They are expected to leave at the end of that time unless there is a need for ongoing protection. It is not possible for Afghani TPV holders who are not refugees to remain in Australia'. The one ray of hope held out by the Minister is that: 'Once they have left Australia they could apply for a visa to re- enter Australia possibly, under the Regional Sponsored Migration Scheme (RSMS). There may be scope for the Burrangong Meat Processors to sponsor the return of those workers, who do not have a debt to the Commonwealth under the RSMS'. However, the RSMS normally requires any such sponsored migrants to have a functional level of English and hold a diploma, (a condition which would disbar most of the Afghans currently in Young). In any case the Afghans are understandably reluctant to return to Afghanistan, given all the hazards undergone in getting to Australia in the first place and spending long periods in detention centres, without guarantees of the right to return with their families.
Clearly, there is an array of concerns that is relevant to the question of the Afghan refugees future prospects as workers and residents of Young, some local and some national in character. It is in this context that this economic evaluation was undertaken.
The largest employer in the area is Burrangong Meat Processors (BMP). The abattoir at Young was established originally as a local slaughterhouse to supply the Burrows family butcheries in Young. The business had a staff of 13 when the present owner purchased it in 1983. It has grown steadily to become a major abattoir, employing around 270 persons and servicing both national and international markets. Its annual sales were $63 million in 2002 and are expected to be about $65 million in 2003. BMP has been a very successful business in this competitive environment. It has secured an expanding market share at a time when abattoirs in some other regional centres have closed. The growth of sales was about 8% in 2000 and over 14% in 2001. BMP management is projecting further growth, and planning to further upgrade its plant and expand its production and chiller facilities in order to meet weekly production targets of 1250 cattle, 22,000 sheep and lambs and 8,500 pigs. If achieved, these target production levels would generate total projected income of over $100 million annually.
BMP has one recurrent problem though - securing an adequate workforce. The production process remains inherently labour- intensive. However, working in an abattoir is hard and somewhat unpleasant work, for modest remuneration. It is not the first choice of employment for many people. Many staff at BMP enjoy the work: some have returned to the plant after trying other jobs. Proportionately more women are employed than the industry average and many appreciate the employment opportunity that BMP offers in the region. All workers have the opportunity to receive formal training and receive qualifications that are accepted by the industry. Nevertheless, rates of labour turnover are quite high, employees staying at the Young abattoir for only 6 months on average, an average that is dragged down significantly because some workers stay for just a few days. Absenteeism is a problem throughout the industry too. An average of about 30 people (or about one in nine of the workforce) are absent at the Young abattoir per day, taking account of those on leave as well as those who simply don't turn up. BMP has sought to get additional labour by running a free bus to bring in extra workers from other towns such as Cootamundra and Temora.
BMP has also sought extra workers by getting Mission Employment, one of the agencies comprising the Federal governments 'Jobs Network' to advertise vacancies at the meatworks nationwide. It was in response to those advertised vacancies that the Afghan refugees first started coming to Young. Mission Employment has arranged 85 job placements at BMP over the eighteen months to January 2003; and some additional workers have come independently, drawn by 'word of mouth' information among the Hosara people in Australia about the possibility of employment at the abattoir.
Income flows generated by the Afghan Refugees
An economic evaluation of the presence of the Afghan refugees in
Young necessarily centres, first and foremost, on the income flows generated
by their employment at the Burrangong abattoir.
Using a time profile of the employment of the refugees, based of figures provided by the manager of BMP, we could estimate that a total of about 4600 person weeks were worked by the Afghans at the abattoir between mid 2001 and the start of 2003.
(b) Wage incomes
Employees at BMP are initially taken on as general labourers, given an induction process and subsequent training, leading to employment as a slaughterman within an average of 6 months. The Afghan have generally progressed rather faster than this average: some three quarters are currently slaughtermen.
Wages are paid at a little above the award rate:
$465 per week for a labourer,
$585 per week for a slaughterman.
Permanent employees being paid these wage rates are also eligible for annual leave and superannuation payments. Employees who opt instead to be 'casual' are not eligible for these benefits and are paid 20% higher wages. Because of the uncertainty about their future status in Australia the majority of Afghan workers have opted to be 'casual' employees.
Based on these employment and wage patterns, an estimate of the total wages paid to the Afghan workers over the eighteen month period is $2. 8 million. This comprises $0.8 million during the first six month period when all employees were paid at the labourers' rate, plus $2. 0 million for the calendar year 2002 when an estimated half of them at any one time were being paid at the slaughtermen's rate.
The total cost to the abattoir was higher than this to the extent that 'permanent' employees also need to be paid 9% superannuation payments; 15% workers' compensation payments must also be paid by the employer, and 6% payroll tax.
On the other hand, the wage payments received by the workers are reduced by the amount of income tax deducted at source.. On the basis it seems reasonable to estimate that income tax payments comprise about 20% of gross income, or approximately $550,000 over the eighteen month period. That means the total net income received by the Afghans working at the abattoir would be $2.25 million. Some additional incomes have been generated by the Afghans doing other casual work such as fruit and vegetable picking on a part- time basis during the harvesting period. It is difficult to estimate the total amount: a conservative estimate would be $18, 000 (comprising 30 people earning $150 per week for four weeks).
(c) Non- wage incomes
Some of the Afghans in Young have also received income in the form of Special Benefits from Centrelink. Typically this has only applied to the first month after arrival, during the period when the prospective workers have been waiting for the results of the medical tests required of all persons seeking employment at an abattoir, and awaiting the next induction program for new workers. Special benefits amount to $374. 90 per fortnight. A snapshot survey of Centrelink records for the relevant 18 months found no Afghans at all in receipt of benefits as of 1.6.2001, 7.9.2001, 14. 12. 2001, 8.3.2002. 14. 6. 2002, 6. 9. 2002, and 13.12. 2002. A conservative estimate of the total benefits paid would be 200 of such fortnightly payments, totaling $75,000. This is a miniscule sum in proportion to the wage incomes: about 3%. It is also pertinent to note that the income received from social security payments is an injection into the regional economy but, being a transfer payment, not into the national economy. By contrast the wage payments generated by the productive labour of the workers is an injection into both the regional and national economy. In round terms, the social security payments are likely to be roughly balanced by the 'leakages' from the regional economy into the national economy (eg. expenditure by the Afghans in Young on products that do not originate in the region). Of course, the fact that the Afghans are in Young and gainfully employed means that the social security costs otherwise associated with having them as refugees is significantly reduced.
(d) Consumer expenditures
How have the incomes generated by the Afghans in Young been spent? What is the average proportion of the Afghans' income spent within the region? A realistic range of estimates based in the preceding information would be between 60% and 75%. The 'leakages' of their expenditure from the regional economy, other than income tax payments, personal savings and funds repatriated, appear to be relatively minor, given the relatively self- contained nature of Young as a retail and services centre and the relative immobility of the Afghans as they focus on working and living in the town during this notably uncertain period in their lives. So of the estimated total net income generated of $2.25 million, it seems likely that between $1. 35 and $1.57 million recirculates in the form of additional regional expenditures. It is difficult to narrow this range of estimates, given the nature of the data sources.
(e) Capital Income and Investment
The BMP manager reports that about $8. 8 million has been invested in capital works at the Young abattoir since 1983. BMP's business plan shows over $1 million reinvested in upgrading various facilities at the plant during 2001 and the first half of 2002. The Afghans themselves have not undertaken this expenditure: rather, the inference is that, without their key role in meeting BMP's labour force requirements, the business would not have been able to generate the revenues necessary to meet all its investment plans.
(f) Multiplier effects
What is the 'regional multiplier' effect arising from the total of the various expenditures? Essentially, the issue is how much of the additional incomes continue to recirculate in the region, adding to further economic expansion.
In the case of the Young regional economy, it is pertinent to note that management at the meatworks stresses that it has a policy of locally sourcing its material requirements, with the exception of abattoir- specific equipment which is largely imported from specialist producers overseas. This has the effect of raising the regional multiplier. On the other hand, a regional economy such as Young is necessarily more open to 'leakages' of local expenditures into other regional economies than is a national economy, which has the effect of reducing regional multiplier effects. The 'guesstimate' by the Shire Council's Economic Development Officer is a multiplier of 3 for economic expansion focused at BMP because it is so crucial to the regional economy. A more conservative estimate would be a multiplier value of 1.5, meaning that for every additional person employed in the local economy another half a job is generated indirectly. On that latter basis, the additional estimated total regional expenditure of between $1. 60 and $1.82 million directly generated by the Afghans in Young would indirectly have generated an additional $0. 68- 0. 91 million, giving a total additional regional income of between $2. 40 and $2.70 million over the 18 month period.
(g) Displacement effects
Against these estimated economic benefits have to be set any 'displacement' effects. In other words, the estimated regional impact would be lower to the extent that the presence of the extra Afghan workers foreclosed other possible regional developments or displaced other employees. There is little evidence of any such negative effects in practice.
The most contentious issues in this regard are whether wage rates are undercut or whether local workers lost their jobs as a result of the Afghans coming to town. Such claims were made by opponents of the Afghan influx. However, interviews with BMP management, other local business people and offices of employment agencies cast strong doubt on the veracity of the claims. The wage rates paid are uniform for all workers. As for the issue of job displacement, what is clear is that the strong reputation quickly established by the Afghans for a strong work ethic made them more sought- after as employees than some local residents with a more marginal attachment to the workforce. So there may well have been some 'reshuffling' of employment priorities at the abattoir. The industrial officer of the Meat Workers Union confirms that there were some tensions about who would keep their jobs and who lost their jobs, particularly when the night shift was terminated. However, it seems that, over the medium term, no local employees lost their jobs directly as a result of the Afghans being employed. The most obvious supporting evidence for this is the continuing active recruitment efforts by BMP. Among other means of addressing continuing labour shortages, it continues to scour neighboring regions for suitable employees by sending its free bus to transport workers to the Young meatworks.
Looking at the official 'jobless' statistics provides further information on the employment situation. The'displacement' effects in the local labour market seem to have been negligible, judging by the Centrelink statistics, notwithstanding the existence of a continuous pool of unemployed persons. It is pertinent to make two related observations. One is that, had there been any 'displacement' effects, the relevant incomes would have been the wages foregone by local workers minus the unemployment benefits they would otherwise received. In the case of workers being 'bused' in from neighbouring towns the displacement effect, as far as the Young regional economy is concerned, would be further reduced in proportion to the share of their personal expenditures which occur outside Young (eg. in Cootamundra or wherever they live). These considerations reinforce the judgement that 'displacement effects' on the regional economy are negligible.
(h) National fiscal effects
The broader 'displacement effect' is the displacement of the Afghan workers from being on special benefits as a result of them being gainfully employed in Young. The benefit of that shows up in Commonwealth government finances. The sum of social security payments 'saved' by having the Afghans working in Young is estimated at $862, 000 over the eighteen month period (ie. 4600 person weeks at $187. 45 per week). Adding to that the estimated total of income tax payments of $550,000 and payroll tax payments of $168,000 (6% on BMPs wage bill of $2. 8 million) gives a total Commonwealth 'fiscal impact' of $1.58 million.
Regional development and the Afghan Refugees: Further considerations
The impact of a group of workers on a regional economy is not purely a matter of income and expenditure flows. There are also effects that operate more indirectly and in a more long- term dynamic manner.
Effects on Productivity:
To quote one of the contributors to the Mayor's book of comments:
"I've spoken to a number of the local staff at the abattoir who have nothing but praise for the Afghani men working amongst them. Their work ethic is extremely high, thus setting a wonderful example to other workers".
Effects on the Reputation of the Town
Young has received quite a lot of national publicity as a result of the acceptance of the Afghan refugees by the people of Young, and by the Mayor and Shire Council.
The multi- ethnic character of the BMP workforce features in publicity material by the Anti- Discrimination Board of NSW. There is a reasonable presumption that this has enhanced the reputation of the town. One of the other contributors to the Mayor's book of comments said that the Afghan presence was 'of significant benefit to our business sector and indeed sends a clear message to business investors that this is a Town and Community opened for business'.
"[I] am in the process of purchasing property on the Central Coast. When told I was from Young the Real Estate agent said that the positive exposure of our acceptance of refugees was worth a million dollars of advertising".
Certainly, the town has been experiencing somewhat of a real estate boom in the last couple of years, by contrast with many other country towns, which anecdotal evidence suggests has been partly fuelled by people moving from capital cities like Sydney. The reputation of Young as a place tolerant of ethnic diversity would likely have had some
effect on this, although it is not possible to know to what extent.
Were the Afghans able to stay on in Young they could be expected to contribute to a rather more cosmopolitan character of the town, eg. by opening restaurants and other small businesses. There is evidence from elsewhere that professionals are more easily attracted to places where there is a cosmopolitan lifestyle. This could help give Young the edge in attracting professionals to town. More modestly, but more tangibly, the reputation of the town's acceptance of its refugees has led to additional income flowing into the regional economy as journalists, a documentary filmmaker and an economic consultant have visited for varying lengths of time, staying in local hotels/ motels, dining at local restaurants and so forth, while undertaking their studies.
Mobalisation of Social Capital
Social scientists in recent years have recurrently stressed the importance of strong social networks in a locality as the basis for economic development. In the case of the Afghans in Young there is evidence of a strengthening of that social capital, as local community groups, the Shire Council and local businesspeople have worked together to make the experiment workable. TAFE teachers, volunteer tutors, the local library staff, Amnesty International organizers, the Mayor and his staff and many others have come together in cooperative activities for this purpose. An Afghan 'cultural evening' organised at the neighbourhood centre attracted 130 people. Strong social bonds have already been created between the Afghans and some of the locals in Young who visit them in their homes and invite them to theirs. The development of social ties, not only between the Afghans and the local people but also among the local community groups themselves, is an important element in building effective social cohesion. The social capital thereby generated is a valuable regionally-
The experience of Afghans working and living in Young is indicative of how settlement policies might mesh better with the commitment to regional development. Even as short- term visitors, in traumatic circumstances of being refugees from terrible tragedies affecting their families and friends, and facing uncertain futures, they have made valuable economic contributions. There has been a valuable direct contribution to the productive requirements of the region's largest business. The incomes and expenditures generated by the Afghan presence are conservatively estimated at between $2.4 and $2.7 million over the 18 months from mid 2001 to the start of 2003. Together with the various indirect economic benefits described in this paper, this comprises a substantial positive economic impact. It is buttressed by a broader 'fiscal impact' on the national economy, estimated at about $1. 7 million over the same 18 month period.
It is not suggested that one positive regional example should drive the whole of national policy regarding refugees. No doubt broader political and strategic considerations need to be taken into account too. However, the regional example cannot properly be regarded as irrelevant to national policy formulation. A national economy is made up of multiple regional economies. The experience of the Young region in hosting the Afghan refugees, as discussed in this paper, can usefully contribute to developing a refugee settlement policy that is simultaneously humanitarian and economically rational
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