Civic leaders in the New South Wales city of Tamworth have been accused of fuelling racial hatred by rejecting five Sudanese refugee families.
Tamworth City Council has voted to refuse an offer by the Immigration Department to resettle five refugee families from the war-torn African nation.
It feared cultural differences and a lack of services could lead to increased violence in the city, which is home to the world-renowned country music festival.
Mayor James Treloar said public submissions showed there was a clear sense of mistrust in the town, after several existing Sudanese residents were charged with driving offences and one with sexual assault.
"The community has expressed enormous concerns of mistrust against the Sudanese people, I think this is largely based on previous events like the Cronulla riots," he said.
"It's a matter of cultural differences, and the sexual harassment of females unfortunately is just one of the problems."
Mr Treloar said Sudanese refugees in Tamworth had proved they do not share the city's values or respect authority.
But Tamworth councillor Diane Carter, who voted for the settlement program, said the mayor's comments fuelled racial hatred within a small minority of the community.
"As head of the crime prevention committee I can confirm that there has been no increase in violence since the arrival of Sudanese refugees, the offences that have been recorded are in the normal range for young men of that age, and the police are not concerned at all," she said.
Ms Carter also said the mayor's comments were misleading because there were more than 12 Sudanese people already living in the Tamworth community.
She said she was appalled at the council's decision and criticised the consultation process.
"Self surveys never show the full picture of an issue, if the council really wanted to get a indication of the views in the community they would have done a random survey targeting various age groups and demographics," she said.
Chief executive of the Refugee Council of Australia, Paul Power, said the attitudes of the Tamworth council were generating a fear of people with coloured skin and that the community would suffer.
"There has been a positive record of integrating refugees into communities who have benefited greatly from this, Tamworth is simply closing itself off from those benefits," he said.
NSW Premier Morris Iemma said there was no evidence Tamworth should fear settling the Sudanese refugees.
"Where they've got evidence that they have something to fear, well, then that's a matter for the appropriate authorities," he told ABC radio.
"But where they haven't that, people ought not to be punished for something they haven't done."
Tamworth has been under consideration as a new regional settlement location since last year, with a public forum on the initiative held on 31 July this year.
Councillors received 492 submissions and questionnaires regarding the proposal, 400 of which Mr Treloar said opposed the settlement program.
"Four hundred community responses didn't want the program, I think these people identified the failing program in Toowoomba," he said.
"Some will see this as a racist community but the reality has identified significant shortfalls in the program offered by the department (Department of Immigration and Indigenous Affairs)," he said.
Mr Treloar said the council would not reconsider the proposal unless the department was prepared to take the community's concerns into consideration.