9. ARGUMENTACIÓN
9.2 LA FLEXIBILIDAD
9.2.7 Métodos para evaluar la Flexibilidad
9.2.7.4 Goniometría
The direct impact of an industry on a regional economy only tells part of the story of its economic impact. Economic impact also measures the extent of flow on effects that result from the direct expenditure, and it also identifies those industry sectors where the flow on effects are most pronounced; i.e. those sectors with closest linkages with the banana industry.
Economic impact studies usually fall into one or two basic categories
• Measuring the contribution of an existing industry to an economy. This is used to show the importance of an industry
• Measuring the consequences of an event or action, such as the attraction of a new industry or closure of an existing industry.
This economic contribution assessment is clearly within the first category, although some elements of the second are also relevant.
Economic impact and contribution are often calculated using non-survey based methods. Input output tables can be constructed using Australian Bureau of Statistics data combined with national accounts tables. This is the approach used in well-established methodologies such as the Remplan model (initially developed at Latrobe University), the GRIMP model (University of Queensland) and the DECoN model (University of Sydney and University of Western Sydney).
Input-output has been in general use as an impact assessment technique for several decades and is considered superior to simpler economic base approaches, especially when there is an absence of detailed data on the contributions and linkages within the economy or economies under investigation. However, it is not without its limitations.
The assessment in this project has the advantage of detailed financial results of a significant proportion of banana growers in each of the three regions under review, supplemented with detailed interviews with over 50 upstream and downstream businesses. This has enabled a reliable assessment of all direct and first round indirect expenditure estimates to be
developed and associated output multipliers to be estimated.
41 SOURCE: ABS, Average Weekly Earnings, Australia Seasonally Adjusted
Output multipliers estimate the total value of sales across all industry sectors in the local economy that result from a unit increase in final demand in the sector being assessed, in this case the banana industry. The output multiplier has a number of components; namely
• the direct impact (expenditure by banana growers),
• indirect impacts (reflecting additional purchases made in the region by businesses that deal with the banana industry as a result of the income they derive from the banana industry),
• Induced impacts (expenditure on local goods and services made by households who earn wages/income from the banana industry).
The direct impact (or direct expenditure) is based on detailed financial results of a significant proportion of banana growers in each of the three regions and is consistent with results presented in the preceding section of this report. However, it has been adjusted to reflect expenditure by industry sector, rather than type of expenditure. Adjustments have also been made to take out components of this expenditure that is paid directly to government and savings that are not re-spent in the region, namely • Taxes paid on fuel and oil (assumed at 38%)
• Taxes paid on wages (based on the marginal tax rates applied to average wages and salaries per effective full time worker). These average 16.5% across the three sub regions
• An estimated percentage of GST paid out of wages based on the proportion of average household expenditure that is made on goods and services that attract the 10% GST42. This resulted in an average of 5.3%
• Average savings per gross household income (assumed at 17.5% based on Reserve Bank of Australia data).
All taxes were allocated to the Public Administration and Safety industry and these, along with estimated household savings, were treated as ‘leakages’ from the local economy.
The multiplier is represented as the infinite series • Y = 1 + c + c2
+ c3 + + cn,
where Y denotes income and c is the marginal propensity to consume. The first term 1 represents the initial expenditure made by banana growers. The second term, c, is the fraction of this direct expenditure which is re-spent purchasing goods and services from local businesses, the third term c2 is the fraction of second round expenditure that is made locally, and so on.
The sum of this series (with c lying between 0 and 1) is 1/(1-c), the output multiplier43.
42Estimation of tax rates is based on ABS data on average net tax payable for SLAs within each region for 2010 (from
National Regional Profile data cube). GST is based on the average proportion of household expenditure made on goods which incur GST (from ABS, Average Household Expenditure Detailed Items 2003/04)
43Salant, William (1975), The Balanced Budget Multiplier as the Sum of an Infinite Series, in History of Political Economy
In the case of the household sector (represented by wages and salaries paid to employees and contract workers) the series is
• Y = 1 + c(1-m) + (c(1-m))2
+ (c(1-m))3 + + (c(1-m))n , where m denotes the average rate of taxation and savings44.
Results are summarised in Table 27.
Table 27 Direct and Total Impacts of the Banana Industry on Local Economies Direct Expenditure by Banana Growers in this Industry Sector % of this Expenditure which is Re- spent Locally by this Industry Sector Total Impact on Sales Resulting from Banana Growers’ Direct Expenditure Multiplier
Agriculture, Forestry & Fishing $6,518,631 62.4% $17,325,273 2.66 Electricity, Gas, Water & Waste
Services $10,450,451 33.3% $16,930,514 1.62
Manufacturing $106,196,506 14.3% $123,920,648 1.17
Wholesale & Retail $57,859,431 19.6% $71,973,924 1.24
Transport, Postal & Warehousing $83,656,930 50.0% $167,313,860 2.00 Financial & Insurance Services $21,726,763 14.3% $25,363,954 1.17 Rental, Hiring & Real Estate Services $4,582,269 43.5% $8,204,504 1.79 Professional, Scientific & Technical
Services $7,394,328 73.2% $27,906,383 3.77
Administrative & Support Services $29,734,416 59.9% $74,178,313 2.49 Public Administration & Safety $70,594,337 44.3% $126,886,912 1.80
Other $3,844,497 39.8% $6,398,466 1.66
Household Sector $170,926,260 58.1% $410,434,434 2.40
Total $573,484,819 $1,076,837,184 1.88
SOURCE: Costs per planted hectare of banana sourced from 'Banana Enterprise Comparison Project # 2 (HAL Project BA 09037)
CDI Pinnacle Interviews with 50 upstream and downstream businesses Street Ryan estimates of multipliers
The value of “c” for each industry sector (or the % of expenditure made locally by businesses in that sector) is derived from results of detailed interviews with businesses that supply and/or provide services to the banana industry.
44Kreuckeberg and Silver (1975), Urban and Regional Planning Methods
Table 27 shows that, for example, banana growers across the three regions spent $7,394,328 on Professional, Scientific and Technical Services. Businesses within this industry, in turn, spent 73.2% of the income they derived from banana growers purchasing goods or services from other businesses within the three regions (“c” for this industry = .732)
The multiplier for this industry is calculated as 1/(1-.732), or 3.77, indicating that the direct expenditure on Professional, Scientific and Technical Services by banana growers of $7,394,328 resulted in a total increase in sales in this industry sector throughout the three regions of $27,906,383.
Overall, Table 27 suggests that the total direct expenditure of $573.5 million made by banana growers in the three regions results in a total regional output (total regional sales) of just over $1 billion ($1.077 billion); i.e. an output multiplier of 1.88.
The size of this impact is greatest for the household sector followed by Transport, Postal and Warehousing, and Public Administration and Safety (including payments to Local, State and Federal Governments) industries.
Strongest linkages (and therefore highest multipliers) are associated with Administrative and Support Services (which includes contract packing etc.) and Transport, Postal and
Warehousing industries.
Results for each of the banana production regions are presented in Tables 28 to 30. Table 28 shows that the direct expenditure of $509.8 million in the Far North Queensland banana production region results in total sales of $951.3 million throughout the region; i.e. an output multiplier of 1.87.
Greatest impact is experienced in
• the household sector ($357 million)
• Transport, Postal and Warehousing ($160 million) • Manufacturing ($115 million).
Strongest linkages within Far North Queensland are evident for • Professional, Scientific and Technical Services • Agriculture, Forestry and Fishing
Table 28 Direct and Total Impacts of Banana Industry Expenditure on the far North Queensland Economy2009-2010 Direct Expenditure Local Consumption (First Round Expend.)
Total Impact Multiplier Agriculture, Forestry & Fishing $6,382,344 62.4% $16,992,282 2.66 Electricity, Gas, Water & Waste Services $7,594,898 25.8% $10,228,853 1.35
Manufacturing $98,605,997 14.1% $114,736,920 1.16
Wholesale & Retail $52,366,269 19.5% $65,061,257 1.24
Transport, Postal & Warehousing $80,146,077 50.0% $160,292,153 2.00 Financial & Insurance Services $13,015,013 14.3% $15,193,805 1.17 Rental, Hiring & Real Estate Services $4,134,850 45.6% $7,605,571 1.84 Professional, Scientific & Technical
Services $6,542,370 74.2% $25,359,993 3.88
Administrative & Support Services $25,140,695 59.9% $62,734,643 2.50 Public Administration & Safety $61,877,569 44.0% $110,576,078 1.79
Other $3,220,246 39.2% $5,297,866 1.65
Household Sector $150,752,578 57.8% $357,233,597 2.37
Total $509,778,906 $951,313,018 1.87
SOURCE: Costs per planted hectare of banana sourced from 'Banana Enterprise Comparison Project Phase 2 (HAL Project BA 09037)
CDI Pinnacle Interviews with 50 upstream and downstream businesses Street Ryan estimates of multipliers
Greatest impact is experienced in
• the household sector ($357 million)
• Transport, Postal and Warehousing ($160 million) • Manufacturing ($115 million).
Strongest linkages within Far North Queensland are evident for • Professional, Scientific and Technical Services • Agriculture, Forestry and Fishing
• The household sector.
Table 29 shows that the direct expenditure of $44 million made by banana growers in Northern NSW results in total sales throughout the region of $87 million; an output multiplier of 1.96.
Greatest impacts occur in
• the household sector ($44 million)
• Public Administration and Safety ($13 million) • Financial and Insurance Services ($8 million).
Table 29 Direct and Total Impacts of Banana Industry Expenditure on the Northern NSW Banana Production Region Economy 2009-2010
Direct Expenditure Local Consumption (First Round Expend.)
Total Impact Multiplier Agriculture, Forestry & Fishing $134,693 59.3% $331,130 2.46 Electricity, Gas, Water & Waste Services $701,612 25.1% $936,381 1.33
Manufacturing $6,003,393 18.5% $7,363,090 1.23
Wholesale & Retail $4,798,662 19.6% $5,971,615 1.24
Transport, Postal & Warehousing $2,183,697 50.0% $4,367,394 2.00 Financial & Insurance Services $7,226,690 14.3% $8,436,481 1.17 Rental, Hiring & Real Estate Services $344,040 30.6% $495,457 1.44 Professional, Scientific & Technical
Services $353,865 59.9% $882,677 2.49
Administrative & Support Services $22,199 14.6% $25,992 1.17 Public Administration & Safety $6,756,228 48.7% $13,167,459 1.95
Other $503,545 41.6% $862,267 1.71
Household Sector $15,265,006 65.4% $44,080,294 2.89
Total $44,293,630 $86,920,237 1.96
SOURCE: Costs per planted hectare of banana sourced from 'Banana Enterprise Comparison Project #2 (HAL Project BA 09037)
CDI Pinnacle Interviews with 50 upstream and downstream businesses Street Ryan estimates of multipliers
Strongest linkages in Northern NSW are evident with • the household sector
• Professional, Scientific and Technical Services • Agriculture, Forestry and Fishing.
The impact of the household sector is relatively greater in Northern NSW than the other banana production regions because Northern NSW has a significantly smaller proportion of its total wages and contract labour expenditure going to back packers and contract labour than both Far North Queensland and Carnarvon, and a relatively greater proportion of expenditure made by backpackers and contract workers in the industry is retained within Northern NSW.
Table 30 shows that banana growers’ direct expenditure of $19 million in Carnarvon results in a total impact of sales in the region of $39 million; i.e. an output multiplier of 1.99.
Greatest impact is associated with
• Administrative and Support Services (which includes contract packers) $11 million
• the household sector ($9 million)
• Electricity, Gas Water and Waste Services ($6 million). Strongest linkages are associated with
• Professional, Scientific and Technical Services • Electricity, Gas, Water and Waste Services • Administrative and Support Services.
Carnarvon has the highest output multiplier of all three regions. This is largely the result of expenditure on rates and water, both of which are fully retained within the local region in the first round of expenditure.
Table 30 Direct and Total Impacts of Banana Industry Expenditure on the Western Australia Banana Production Region Economy 2009-2010
Direct Expenditure Local Consumption (First Round Expend.)
Total Impact Multiplier Agriculture, Forestry & Fishing $1,593 14.3% $1,860 1.17 Electricity, Gas, Water & Waste
Services $2,153,941 62.6% $5,765,280 2.68
Manufacturing $1,587,115 12.8% $1,820,638 1.15
Wholesale & Retail $694,500 26.2% $941,052 1.36
Transport, Postal &
Warehousing $1,327,156 50.0% $2,654,312 2.00
Financial & Insurance Services $1,485,060 14.3% $1,733,668 1.17 Rental, Hiring & Real Estate
Services $103,378 0.1% $103,476 1.00
Professional, Scientific &
Technical Services $498,093 70.1% $1,663,713 3.34
Administrative & Support
Services $4,571,523 60.0% $11,417,679 2.50
Public Administration & Safety $1,960,540 37.6% $3,143,375 1.60
Other $120,707 49.4% $238,333 1.97
Household Sector $4,908,676 46.2% $9,120,542 1.86
Total $19,412,283 $38,603,929 1.99
SOURCE: Costs per planted hectare of banana sourced from 'Banana Enterprise Comparison Project Phase 2 (HAL Project BA 09037)
CDI Pinnacle Interviews with 50 upstream and downstream businesses Street Ryan estimates of multipliers
Far North Queensland and Northern NSW, on the other hand, have a more even distribution of impacts across all industry sectors. For example, there are four industry sectors in Carnarvon that have an output multiplier of less than 1.2 and five less than 1.4. It also has a much smaller impact on the household sector than the other regions, reflecting a greater proportion of expenditure leakage by workers (both employed and contract) in Carnarvon.