In two weeks, the Treasurer will hand down a federal budget. Buried deep in the fine print is a line item most Australians will never see, yet it goes to the heart of an industry which is already central to everyday life and which Australia can’t afford to ignore.
The Australian Space Agency is facing a 70 per cent cumulative funding cut over two years. Thirty per cent last year and another 40 per cent coming. For an agency that returns $7 for every $1 invested in leading-edge research and industrial capacity, it’s a strange place to find savings, and the timing could not be worse.
The agency’s funding cliff has arrived just as the system is working, just as many opportunities which Australia has spent years working toward are finally within reach. Established in 2018, the Australian Space Agency was created to build on more than 60 years of operational heritage in Australia’s space sector.
That foundation includes unique geographic advantages, such as our vast landmass in the southern hemisphere, and our expertise in providing ground stations that track and communicate with satellites and spacecraft.
The Australian sector now employs more than 19,000 people, generates $4.6 billion in annual turnover, and gives Australia a near-100 per cent market share of payload returns from space to commercial spaceports.
Companies such as Gilmour Space, now supported with major investments by the National Reconstruction Fund, were developed through determination and innovation, and in part through early Agency grants.
The pipeline is working and weakening the agency now risks undermining the system that created it.
A cooperation agreement with the European Space Agency (ESA) is on the table that would open the world’s second-largest space market to Australian companies. Canada has held an equivalent arrangement since 1979. It reports a 3:1 return on contributions.
The UK reports 7.5:1 on its ESA investments. These agreements don’t run themselves. They need an agency with the specialists and resources to negotiate and implement them in a strategic manner to maximise the benefits for Australia.
Virtually all of Australia’s peer nations are accelerating investment in space because the returns and benefits are so clear.
The European Space Agency just increased its budget by 31 per cent, Japan launched a $6.7 billion Space Strategy Fund open to international partners. Canada committed to a tenfold increase in its ESA contribution, and Germany has pledged €35 billion for civil and defence space capability by 2030.
The global space economy is projected to reach US$1.8 trillion by 2035, roughly equivalent to the size of Australia’s entire economy today.
Since 2019, every comparable nation has released a national space strategy to ensure they can capitalise on this unique opportunity, while Australia has not.
The recent Independent Review of the Security of Critical Infrastructure Act found that space underpins every critical sector – including energy, banking, healthcare, transport, and defence.
The atomic timing infrastructure behind financial transactions, the positioning and GPS data behind logistics and emergency response – it all runs on space assets which Australia doesn’t own and can’t replace.
Building domestic capability in that context is the kind of thing that looks obvious in hindsight, usually after something goes wrong.
The ask is straightforward and comes down to funding stability for the Australian Space Agency, a sustained baseline that keeps the agency functional and able to continue to develop the industry to the next level.
The grant programs that helped build companies like Gilmour Space need to continue, and the partnerships under negotiation require an agency with the capacity to see them through so that Australia sees the benefits.
This federal budget will not settle every question about Australia’s role in the space economy, but diminishing the agency responsible for answering them carries long-term consequences. Industry can only develop with continuing support, and specialist capability takes years to build.
Modest investments now show every sign that they would deliver exponential returns for Australia, and in one of the most important ecosystems of the future.
Dan Lloyd is Chief Executive Officer at the Space Industry Association of Australia.
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