Australia’s “huge advantage” in one surprising industry could bring endless economic growth – but we could miss out if investment isn’t ramped up soon, according to experts.
The space industry isn’t typically seen as a strength of Australia’s, but the country’s geography, its stable climate and government and its proximity to the equator place it in a “unique spot” to become a leader in the domain.
According to Orbital Radar and the Information Technology and Information Foundation, the global space economy is currently worth $894 billion and is set to almost double to $1.44 trillion by 2034.
Private businesses, like SpaceX, make up the lion’s share – some 78 per cent – of the market, but governments are also getting in on the action, spending billions every year as they treat space as critical infrastructure, and its control central to national security.
A report by consulting firm Novaspace found total spending by governments across the world on space programs hit a record $195 billion in 2025 and is expected to jump by another 20 per cent this year.
The firm’s 2024 analysis found the US spent a whopping $113 billion – 59 per cent of all global government spending.
China came a distant second, having spent $28 billion, followed by Japan with $9.5 billion. Australia clocked a measly $777 million, ranking 12th.
James Palmer, whose company Space Centre Australia is building the country’s first large-scale, multi-use rocket pad on the Cape York Peninsula in Far North Queensland and which counts former Prime Minister Scott Morrison as its chair, said the industry has a “huge potential” to bring in lots of economic growth to Australia.
“I think the country needs to learn more about it because space is still a big unknown for a lot of people,” the pioneering space boss exclusively told news.com.au.
“What I hear a lot is, ‘why spend billions of dollars on space when I’m struggling to pay my rent, or when many people are homeless?’ But what I’ve seen over the years of doing this is that it’s got potential to change the socio-economics of the area that it’s in, for the better.
“It employs people, it educates people, it inspires the young to actually work harder and do something. It shifts the focus away from the more negative aspects of society into something that’s actually got a future, and that’s a very hard lesson to teach.”
‘Always evolving’
Mr Palmer said there was a lot Canberra could do to attract space companies into Australia. This includes bolstering agreements with allies so they can easily use our launch pads, simplifying regulations and investing heavily in the sector.
He said incidents such as the explosion of a Blue Original New Glenn rocket during testing in Florida in May, which he believes has left the launch pad inoperable for some time, was a golden opportunity for Aussie companies to step up and offer their launch complexes as a stop-gap.
“We certainly know there are people in America that want to use Australia. They tell us every day. These are big people – not the small rockets. But, they still can’t come over unless there’s a connection and government-to-government agreements,” he said.
And there are huge economic dividends for doing so.
“The standard thing that’s said is for every dollar we spend, there’s a $7 return on investment. So, when you start talking about a space port program that is beyond $500 million in infrastructure development, you’re probably going to get seven times that back,” he explained.
In fact, a 2023 economic impact study by NASA found for every million dollars spent on labour, $6.8 million was generated for the US economy. And for every million dollars’ worth of output generated by the US space service, a healthy $8 million of output was generated for goods and services in the general economy.
“Space is always evolving. There’s always new tech around the corner. I mean, [Elon Musk] is a trillionaire now. That’s huge for the industry. We can have a slice of that pie if we build the industry up further and put more effort into it,” he said.
It’s a sentiment shared by professor Alan Duffy from Swinburne University. The astronomer said Australia’s vast geography and sparsely populated areas are perfect for launch and recovery missions.
“This is a huge advantage for Australia,” Prof Duffy told news.com.au.
“We have potential launch sites close to the equator, so you take advantage of the Earth’s rotation to achieve your escape velocities and save fuel, thus reducing costs. Beyond our geographic advantage, we’re also a stable nation. We offer a law-abiding, rules-based site for investment for foreign companies and nations to launch from. All of those advantages, however, are also tied to the workforce and we have a very large technical and educated population that can leverage these benefits. That’s the good news.”
But decades of intermittent government funding and a lack of direction and purpose has hobbled Australia’s nascent space industry.
Prof Duffy said that “every 20 or so years, it seemed we had another opportunity as a nation” to build our space industry – but that the government of the day, whether it be Liberal or Labor, would ultimately decide against supporting it.
“This is a bipartisan issue in which we have support that is not consistent over the decade-plus,” he said.
“If you’re thinking of building a space port, a rocket company or a satellite company and all the products and services that come from space, from weather forecasting to bushfire monitoring, to disaster relief and provision of secure communication for those people that are stranded in those regions, you need to know there will still be a market and support from government 10 years in, because that’s the amount of time it takes.”
‘Be more daring’
One way the government can achieve that is by making sure we can independently develop, control and sustain the space industry without significant foreign interference – a strategy commonly known as sovereign capability.
This includes onshoring supply chains, investing in Australian businesses and producers, building our own satellites, space weapons and rockets and creating a “national mission” which corrals both government and industry behind a central aim to get us into space.
And it’s not just about conquering space, Prof Duffy said.
“If we want to ensure there is a satellite watching our nation during the next bushfire season, it has to be our satellite. We currently rely on others and they are not pointed at this nation,” he said.
But attitudes are changing, according to the professor. In a clear sign of the importance of space to national security, the Australian Defence Force launched the country’s very first Space Command in 2022, tasked with leading space-related operations.
The government has also established a $15 billion National Reconstruction Fund which Aussie space firms can tap into, and already have: $75 million went towards helping Gilmour Space Technologies to develop Eris, an Australian made rocket the company launched from its orbital spaceport at Abbot Point in North Queensland.
Another $10 million went to Hypersonix Launch Systems to test, develop and manufacture hypersonic aircraft, while another $75 million went towards helping Aussie companies scale up and expand their manufacturing base.
Meanwhile, Katherine Bennell-Pegg is the first qualified professional astronaut to train under the Aussie flag – and she could soon be taking part in a mission to the International Space Station.
But experts say this is still not enough, and more focus and investment from the government is needed if the country’s space industry is ever truly going to take off.
That means being daring and risk-taking, Prof Duffy said.
“It’s really important to recognise how hard space is. We say this all the time. Every company will experience setbacks. The important thing is you recognise that and you ensure you have the resolve to continue to reap the benefits,” he said.
“SpaceX lost countless rockets at the start – I think literally half a dozen rockets blew up – and now it’s a $2 trillion company. You don’t succeed without taking risks. They have to be carefully managed, and considered, but, if we want to grow as a nation, we have to be more daring.”
A spokesperson for the minister for industry and innovation, Tim Ayres, said: “Australia’s domestic space industry plays a role in strengthening our national resilience and securing our future in a more competitive global environment.
“In the most recent Budget, the Australian government’s commitment to Australian space is clear with $21.7 million to ensure the Australian Space Agency continues to perform its policy and leadership role for Australia’s space industry.
“In addition to this, the Albanese Labor government has invested over $150 million in the domestic space industry through the National Reconstruction Fund over the past 12 months, building domestic capability and crowding-in private capital to grow the sector.”