$1.2bn space program cut from budget

Industry Minister Ed Husic has scrapped a $1.2bn space project endorsed by NASA under Labor’s savings drive.

Industry and Science Minister Ed Husic, with ACT Labor MP David Smith at NASA’s Canberra Deep Space Communications Complex. Picture: Martin Ollman/NCA NewsWire

Industry Minister Ed Husic has scrapped a $1.2bn earth observation program endorsed by NASA under Labor’s federal savings drive, re-prioritising $452.4m over the forward estimates to support budget repair.

As Jim Chalmers finalises a bigger 2022-23 surplus than projected in last month’s budget, Mr Husic on Thursday will terminate the Morrison government’s ­National Space Mission for Earth Observation program.

The Albanese government sparked concerns in the space industry over funding cuts after Mr Husic ordered a sweeping review of Coalition-era grants and programs after the election last year.

The axing of the NSMEO program, which was announced by the Morrison government weeks out from polling day, is expected to upset key stakeholders in South Australia, where the Australian Space Agency is based.

NASA signed a joint statement with the Australian Space Agency at the Colorado Space Symposium last year, agreeing to work together on “enhancing earth observation from space”.

Under the first phase of the NSMEO program, four locally designed and built satellites would have launched between 2028 and 2033, giving Australia access to global Earth observation data including land imaging.

Earth observation data is currently provided to Australia by international partners. While no tenders or commercial contracts had been engaged, about 30 staff and prospective partners have been informed and affected public servants will be reassigned.

The Australian understands the May budget included savings from the dumped program in the undisclosed “decisions taken but not yet announced” section.

Mr Husic, who is maintaining Australia’s Moon to Mars initiative funding, said the government “values the role our space sector plays – that’s why in our recent budget we placed the Australian Space Agency on sustainable ­financial footing”.

“Not only does the sector draw on significant support from across portfolios, but space-­related firms will also be able to access capital through our $15bn National Reconstruction Fund plus our … $392m industry growth program,” he said.

In a speech at the World Mining Congress in Brisbane on Thursday, Dr Chalmers will praise miners for helping to deliver the nation’s first surplus in 15 years on the back of bumper ­exports and surging tax receipts.

Treasurer Jim Chalmers on Thursday will praise miners for holding-up the budget in a speech at the World Mining Congress in Brisbane. Picture: Jeremy Piper/NCA NewsWire

Amid rising tensions between the government and miners over Labor’s industrial relations, environmental and climate reforms, the Treasurer will focus on the potential of the renewables revolution and critical minerals rather than cash-cow commodities including coal, iron ore and LNG.

With Labor strategists concerned about losing ground in Western Australia and needing to win regional Queensland seats, Dr Chalmers will champion mining companies for driving a bigger 2022-23 surplus than the $4.2bn budget forecast.

“The resources sector has been a force for good and I’m here to acknowledge that and convey my appreciation for that. Australians and especially I think Queenslanders know that the resources sector has been, is, and will always be a critical contributor to our ­national prosperity,” Dr Chalmers will say.

“It’s the largest sector of our economy, employs around 300,000 people including 70,000 here in Queensland, accounts for two-thirds of our exports bringing in around $460bn a year, and has been a critical source of productivity growth.”

He will confirm resources companies delivered two in every 10 dollars of record revenue windfalls on the back of high export prices and say “we know and ­appreciate that your success is ­indivisible from our success, as a nation and as a state”.

Amid growing fears of a recession and a sharp deceleration in economic growth later this year, Dr Chalmers will warn mining chiefs that “we need to navigate together some very difficult global and domestic conditions”.

He will also ask miners to back the green power revolution, saying “we don’t need to choose ­between resources and renewable energy – or between mining and manufacturing”.