Budget cuts have crippled Australia’s fledgling space program and compromised the country’s sovereignty, analysts have warned, as the axing of a series of programs leaves “in limbo” an industry that was only recently feted as one of the country’s most promising growth sectors.

The June decision to cut the $1.2 billion National Space Mission for Earth Observation (NSMEO) – which former Minister for Science and Technology Melissa Price last year said “will create the foundation of industry know-how for more complex space missions next decade” – came after the government’s May announcement that it would cut $77 million allocated to three other programs.

Those cuts – which affected the Australian Spaceports, Australian Technology into Orbit, and Moon to Mars program – affected core infrastructure necessary for Australia to build a viable space industry, including development of space ports and rocket launch sites that were intended to provide a platform for future space activity.

The cuts come just three years after a far more optimistic Morrison Government announced the new Australian Space Agency (ASA) would be based in South Australia to anchor an industry expected to create 20,000 jobs by 2030.

That was before the pandemic threw the world economy into chaos, ultimately forcing the new Albanese Government to “make the tough call”, Minister for Industry and Science Ed Husic explained in a radio interview.

Despite announcing the programs, the previous government “hadn’t signed any contracts, they hadn’t opened up tenders even to get there,” Husic said. “Sometimes in these roles you’ve got to make the call to find the savings.”

Yet the “brutal” cuts will compromise Australia’s potential to play a role in space industry development moving forward, warned Bec Shrimpton, director of the defence, strategy, and national security program at the Australian Strategic Policy Institute (ASPI), who called out the “timidity, and even ambivalence, with which Australia has assumed its role in space.”

Australia’s “stunningly insufficient” funding for space programs – $34.2 million this year – shows how far we lag behind other countries, Shrimpton said, noting that Canada has allocated $2.8 billion ($CDN2.5 billion) to space programs during the current fiscal year.

Although the data that would have been created by projects like the NSMEO can be sourced from other countries, other fundamental capabilities risk hobbling an industry that was only recently celebrating the government’s bold new space vision.

“Commercial actors have set loose a ‘virtuous circle’ in space,” Shrimpton wrote. “If Australia and its allies want to avoid being left scrambling for industrial and technological capability for space, we need to act now.”

Shaking space investors’ confidence

Australia is far from out of the space industry, with a recent reaffirmation of its role in multinational space defence initiatives and ongoing involvement in space-related programs, such as last year’s successful NASA-backed commercial rocket launch and involvement in the planned 2026 Moon to Mars project and Artemis lunar rover program.

Local innovators have also been kicking goals, with Fleet Space recently announcing it had completed a successful $50 million Series C fundraising round that would support the global expansion of its Exosphere minerals exploration platform.

Yet with limited sovereign launch capability and international rivals spending billions to pull ahead in a rapidly intensifying global space race – which has become so heated that Nokia recently announced it would deploy 4G mobile base stations on the moon – academics have warned that the cuts are compromising the Australian government’s stated commitment to innovation.

That sentiment, in turn, is becoming “a chilling factor” on the Australian space industry, warned Swinburne University astronomer Professor Alan Duffy.

“We’re undergoing an incredible space race,” he recently told the ABC’s 7:30 Report. “Unlike past ones between superpowers, this is one between startups [and] everyone is trying to get ahead of everyone in terms of technology.”

“The space industry is currently in limbo,” he continued. “We have been awaiting large investment decisions, postponing our own investment as a result.”

In the wake of the government’s decisions to cut key programs, he continued, “industry is having to decide whether there’s a future sector that they want to invest to grow within.”

“The space sector is critical to all of our efforts on Earth. If you don’t have space, so much of our modern economy just stops.”