Australia is commonly characterised by commentators as a middle power – a state with hard power characteristics below that of a super power or great power, but which has the capacity to moderate and influence international affairs. Because of this, Australia has traditionally been able to act in, and think independently about, the world from a distinctly Australian perspective – effectively exercising middle power diplomacy and maintaining balance within the international order.   But Australia’s position and relevance as a middle power moving forward is contingent upon the establishment, maintenance, and development of an active governmental space agency and space policy.
The active maintenance of a space program has become an increasing means and requirement for states to sustain relevance and project power internationally, with the number of countries possessing independent launch capabilities numbering ten.  These consist of one superpower (US), six great powers (China, Russia, Japan, India, Iran, Israel), two middle powers (UK, France), and one developing power (North Korea).   
While Australia consistently ranks as one of the world’s most technically capable states,  its independent military and economic capabilities in outer space remain virtually non-existent. In September of 2017 the Ministry for Industry, Innovation and Science under the Turnbull government announced its commitment to the creation of an Australian space agency.  However, political uncertainties persist; given that the executive declaration by the liberal government is not a bi-partisan initiative, and the declarative formation of a space agency presently lacks a legislative basis (pending revisions to the Space Activities Act). 
Presenting a public case for Australia’s development of a robust economic and legal framework for outer space in the form of a space agency requires multiple things. It needs a consideration of the existing global space environment, an overview of Australia’s space environment and the reasons underlying the creation of a space agency, and the economic viability of such a measure.
Outer space has long been a key area of strategic importance for states.  This emerged in 1957 with the launch of the world’s first artificial satellite, Sputnik 1, by the Soviet Union. Its orbital path over the United States initiated public alarm over the loss of the strategic high ground, and initiated the Space Race between the two Cold War superpowers.  Since then, technological developments have played a pivotal role in international relations. Indeed, throughout the 20th and 21st centuries, the development of information and communication technologies have facilitated the transition of states from industrial to post-industrial information societies, characterised by novel forms of transnational production and distribution processes. 
In relation to a state’s hard power capabilities, technological developments in space contribute to its military and intelligence (i.e. GPS, Corona spy satellites), WMD capabilities (i.e. ballistic missile and aircraft delivery systems), and wider technical capabilities (i.e. cybersecurity).  Pertaining to a state’s soft power capabilities, developments in space are conducive to a state’s image and reputation – as seen during the Cold War, where the Space Race served as a propagandistic element for the greater ideological conflict of communism and capitalism between the USA and USSR.  
A state’s ability to project power internationally within the 21st century and beyond is contingent upon their capacity to develop a thriving space-based economic and legal framework. In Australia’s case, continued economic prosperity and strategic security is assured if we can adapt ourselves to the challenges of the developing Space 2.0 economy though increased governmental support and involvement, and by supporting and cooperating with the private space sector.
Australia possesses a strong scientific base, with a high-intensity volume of public research and development expenditure, world class-universities, and high-quality scientific publications.  Moreover, Australia’s economy is regarded as the 22nd most competitive state out of 138 surveyed states; per the World Economic Forum.  Yet out of the 35 OECD members, Australia remained one of two members without an active governmental space agency.  Despite the government’s indication of the formal creation of a governmental space agency in September 2017, Australia’s turbulent history in outer space affairs elicits doubts over our preparedness to meet the challenges of the burgeoning ‘Space 2.0’ economy.  Space 2.0 refers to the future of private entities facilitating space travel and exploration, and the wider integration of existing and emerging technologies into space. 
Rationale behind an Australian space agency
Considering the continuous disregard by states of established international principles pertaining to outer space, the adoption of a realist position by Australia is necessary. Indeed, the ever-present propensity of states to unilaterally pursue power, to advance national security interests in the global community, has fostered a spiral of insecurity as nations compete to accumulate power in outer space. 
Space is increasingly being perceived as a new frontier, one that will be exploited as part of the inevitable and enduring struggle for state power.  Australia must therefore seek to actively secure its position in space through the establishment of a space agency and development of indigenous space capabilities. The existence of a space agency creates coherence across a complex sector, fosters scientific progress and international collaboration, oversees a state’s exercise of geographical sovereignty (landmass/oceans/atmosphere), and contributes to sovereign security. 
There exist a multitude of reasons that justify the creation of a space agency in Australia. Firstly, a space agency would establish the utility of satellites and other space technologies useful for addressing Australia’s unique problems; including bushfire tracking and geological surveyance.  This would lead stakeholders to engage with the industry, rather than the industry seeking engagement with stakeholders – a more proactive developmental approach for industry growth.
Secondly, a dedicated agency would allow Australia to play a proactive and leading role in space activities. At present, Australia assumes a reactive approach to overseas initiatives on space missions, and a space agency would be instrumental in committing Australia to significant involvement in international programs and projects with allied and partner states.  Most pressingly, an agency would drag Australia out of its dependence oriented approach to satellite utilisation.  The disadvantage of such dependence is illustrated within the Australian bushfire monitoring system, Sentinel (which relies on raw satellite data being processed in the US); posing a major risk during crises like the US government shutdown of 2013. 
Third, a space agency would stabilise funding for space related activities and initiatives. Apart from the recent plans for an independent space agency, government funding for space was historically non-existent. The Australian Space Research Program (ARSP) between 2009 and 2013 represented the most recent government funded initiative; after which no further funding was committed for the foreseeable future. 
Further, a space agency would stimulate the domestic space industry and wider economy. While the Australian space sector records annual revenue of $3 billion AUD and employs 11,500 people, it captures only 0.8 per cent of the global space economy.  There is significant scope for this industry to expand further by building upon Australia’s strengths in innovation and technology. For example, NASA illustrates how the growth of a civilian space industry has resulted in various technological spinoffs (i.e. LEDs, cordless tools, water purifiers).  With every $1 USD spent by the US government on NASA, the agency contributes $10 USD (approximately $13.30 AUD) to the economy in the form of spinoff technologies and employment.  
Finally, a space agency would safeguard geopolitical security and project leadership. It would promote and secure Australia’s national security interests in space, maintain Australia’s reputation as a dynamic and competent middle power, and contribute Australian perspectives to international multilateral organisations and within international agreements and disputes. 
Leadership, through a governmental space agency, is required to adequately capitalise upon the developing global space economy. Successful government leadership was previously illustrated within the $40 million ARSP, which provided 14 grants to domestic and international consortiums as a means of fostering improved connections between industry and government.  Outcomes from the ASRP included collaboration between government and business, the development of niche capabilities and human capital, and promotion of the Australian space sector with various positive spill-over effects. 
The global space environment
The increased pace of advancement among nations within outer space should serve as a catalyst for Australia’s development of a governmental space agency. Space is becoming increasingly territorial, as more states gain access to space and construct space infrastructure for the following century. Should Australia further delay its entry into space, it risks being at a severe economic and military disadvantage. Developments within the global space environment can be examined along economic developments, and geopolitical developments.
OECD nations have sought to configure and reorient their industrial research and development capabilities in response to the emergence of the Space 2.0 economy. Global venture capital investments in Space 2.0 have increased from $1.8 billion USD in 2015 to $2.9 billion USD in Jan 2016 (approximately 2.4 and 3.8 billion AUD), of which 80 per cent were invested within the preceding five years.  Moreover, between 2000-2015, space start-ups accumulated $13.3 billion USD in investment funds and $2.9 billion USD in venture capital (approximately $17.7 and $3.8 billion AUD).  This growth trend has aligned with the development of the global space industry expanding from $240 billion USD to $323 billion and $350 billion USD between 2010, 2015 and 2017 (approximately $319, $429, and $465 billion AUD respectively).  
Developing countries such as India and Ethiopia have also sought to establish themselves in the global space industry. The Indian Space Research Organization is currently undertaking the development of inexpensive rocket vehicles and mass deployment of nanosats,  to develop its satellite capabilities for mapping and surveying crops and damages from natural disasters. They are also constructing a space infrastructure that would ensure its ease of access to space and enable telemedicine and telecommunications for remote areas. 
Regarding the geopolitical climate pertaining to outer space, the rapid growth of the Space 2.0 industry has compelled many states to intensify their civil and military space activities. The mass proliferation of Space 2.0 related industries (i.e. space tourism), the vast potential for resource exploitation in outer space, and increasing affordability of access to space have been underlying factors within the desire of many states to reform the 1967 Outer Space Treaty (OST).  The OST has served as the international framework in governing states’ actions in outer space for the past fifty years, with the broad purpose of preserving outer space and its celestial bodies as the “province of all mankind”, which is not to be claimed or weaponised by any state. It has fallen upon the United Nations to balance between the universal principles of freedom of exploration, freedom of navigation/access, and freedom of scientific investigation and the sovereign national security priorities and economic imperatives of individual states. 
In response to international deadlock over reforms to the OST, certain governments have taken unilateral action to capitalise upon their indigenous advantages in space technologies, leading to the prospect of increased tensions and inequality between developed versus developing states, and their access to space and natural resources on celestial bodies. This was illustrated by the 2015 United States Space Act,  which saw the US government recognise the rights of private US entities to extract, possess, and sell natural resources from celestial bodies.  Given the intensification of commercial ventures in space by US space companies like SpaceX and Blue Origin, the US appears to be leveraging its advantages and expertise in space to redefine the international legal order through an assault upon its settled principles – including that of states’ rights to scientific exploration in outer space, and the prevention of unilateral commercial exploitation of space resources.  While this action is not technically prohibited by the OST, the actions of the US threaten to devolve the international legal framework of outer space into an anarchic free-for-all.  Luxembourg has similarly passed its own domestic legislation, which provides private entities with the rights to space resources extracted from celestial bodies. 
Additionally, China’s National Space Administration has sought to intensify space exploration as a means of bolstering national soft-power prestige and reputation, and developing military hard-power capabilities. China achieved a significant milestone in launching a human into orbit in October 2003, being only the third state after the Soviet Union and US to independently achieve such a feat,  and harbours ambitions to establish its own independent space station in low Earth orbit by 2019.  This reinforces the contention that while human spaceflight is the least scientifically beneficial use of human and fiscal resources by national governments, the geopolitical benefits are enormous.  China uses these achievements as propaganda to effectively quell internal dissent, promote national pride and unity, and bolster its international legitimacy.
However, China’s aspirations in space do not appear overly peaceful, given its development of Anti-Satellite (ASAT) weapons, including missiles, co-orbital systems, and cyberweapons.  Most troublesome is its reckless disregard for the OST and internationally settled legal principles – driven by its practical considerations of regional security and influence, and its desire to develop capabilities to facilitate asymmetric warfare against a superior foe where required.  This was highlighted in its destruction of a redundant weather satellite in January 2007 using an ASAT missile, creating 3,000 pieces of orbital debris which has continuously posed a threat to other nations’ access to space ever since. 
Australia’s space environment
Australia’s strategic focus remains upon the sophisticated utilisation of space through international and commercial partnerships. Australia is primarily an import-based space economy, being a sophisticated “second-hand” user of space rather than a producer or active contributor.  This has seen Australia focus its research and development initiatives upon the inexpensive, and less intensive, aspects of space activities.
Accordingly, Australian universities and research organisations are increasingly involved in various aspects of space research and development, leading the world in development of scramjet technology, radio astronomy, computer sciences, and CubeSats. Australia further participates in space missions (i.e. eLISA), possesses deep-space tracking facilities, and possesses the most productive geodetic observatory in the world.   These technologies have proven instrumental in fulfilling and supporting the more niche aspects of human exploration, and utilisation of resources in outer space by more capable partner nations.
However, Australia’s continued emphasis on “second-hand” space activities has proven more detrimental than initially thought, serving to delay the emergence of indigenous capabilities and stunting economic growth and development. As mentioned, the Australian government spends roughly $3 billion AUD per annum on space services and related activities (i.e. S&T research, GNSS),   which totals only 0.8 per cent of the global space industry. The key areas of funding pertain to national security, telecommunications and broadcasting, international development assistance, environmental monitoring, and space scientific and industrial research and development.  However, the Australian space industry is dominated by defence agencies and defence industry entities, with minimal share for civilian commercial activities. As 72 per cent of space industry companies have the Australian Defence Force as a customer, defence remains the major industry sector for companies, followed by mining (67 per cent), and the federal government (59 per cent).  Naturally, the Australian government announced a $500 million investment in June 2017 towards improving Australia’s space-based intelligence, surveillance and reconnaissance capabilities – primarily to support the military and border protection.  Conversely, the global space industry is proportioned as 80 per cent for commercial activities, and 20 per cent for government activities. 
Resolute action and competent leadership, in the form of a robust space agency and unified policy, is necessary to adequately develop Australia’s independent and indigenous capabilities in space. This has been highlighted by Australia’s consistent dependence on satellite data being supplied by other countries;   being reliant upon Japan for meteorological data, and upon China for bushfire tracking.  This has dire implications should terrestrial geopolitics motivate such foreign governments to exploit Australia’s access to such space capabilities as a bargaining or negotiating point during periods of natural disasters.
Additionally, Australia’s existing space infrastructure has been outsourced to foreign entities, with the National Broadband Network  and Optus satellites  having been built and launched by foreign entities. This could prove fatal should such technologies possess covert built-in backdoors and vulnerabilities within their software or hardware, allowing foreign entities or non-state actors to hijack or disable such satellites at will. Continued reliance on other nations for access to space and space technologies not only damages national prestige, but also endangers Australia’s livelihood and economy in being subservient and susceptible to the whims of partner nations and the diplomatic climate.
A heavily militarised space industry and program bears comparatively little benefit for a nation’s economy, given minimal opportunities for the development of spin-off technologies to feed back into the economy.   This is owed to the overriding need for secrecy and confidentiality surrounding such space technologies employed by the defence industry by the government, often in the name of national security and preserving industrial secrets for covert use. Indeed, such technologies developed by the military do not often feed back into the civilian economy for decades.  
Economic viability of an Australian space agency
The 1985 Madigan Report, commissioned by the then Minister for Science, recommended the establishment of an Australian space agency with a budget of $100 million AUD over five years; an amount reiterated by the then-existing Australian Space Office.  This was perceived as necessary to obtain the desired level of Australian industry participation in space manufacturing. A proposed budget of $100 million could involve $20 million for staff and related overhead costs, $50 million for public/private technology projects, $15 million on collaborative space technology with partners, and $15 million for launch site development. 
The question arises whether potential payoffs from an indigenous space agency would be economically beneficial for Australia. This is commonly validated by the example of the UK space agency, where an assessment of the returns from public space investments indicated the following return amounts per £1 of public investment into space science and innovation: 
- Earth Observation – £2-£4 (direct), £4-£12 (spillover).
- Telecoms – £6-£7 (direct), £6-£14 (spillover).
- Navigation – £4-£5 (direct/partial), £4-£10 (spillover).
Within this context, spillover returns on investment encompass the development of spillover technologies, or resultant consumer goods and services developed as a result outside the space industry. Thus, over time, the amount of returns on investments into space technologies accrues.
Potential payoffs of an Australian space agency, and directed investments in space based projects, are illustrated within the ASRPs proposed Garada Synthetic Aperture Radar (SAR) Formation Flying Project – a space engineering research project with international collaboration. While the estimated total cost of the program was $800 million AUD, a complete return upon its investment amount was highlighted within the benefits of its operational capabilities.  Firstly, Garada’s ability to improve efficiency of non-irrigated agriculture would have independently covered the investment cost. Where Australia has $28.3 billion of agricultural projection from non-irrigated areas, the program could self-finance in improving efficiency of agriculture by 0.35 per cent.
Further, Garada’s ability to improve irrigated agriculture infrastructure would have independently covered investment costs. Between 2008 and 2009, $300 million was spend on irrigation equipment, with a total equipment and infrastructure value of $8.5 billion. The program was capable of self-financing by reducing irrigation infrastructure cost by seven per cent.
Finally, Garada’s capability to improve targeting of environmental flows would have independently covered investment costs. Existing requirements to reduce irrigation usage by 2750GL per annum in the Murray Darling Basin (MDB) amounts to an $11 billion loss in agricultural production. The program was capable of self-finance by reducing MDB environmental flows by one per cent.
Australia’s risk of being left behind on earth
While acknowledging the dominance of the great space powers (i.e. USA, China, Russia) Australia must provide for its own defence. Australia as a middle power must be capable of influencing aspects of the international space framework and refining its details in ways that will suit its regional interests.  Australia’s geopolitical standing and national security interests can only be safeguarded and advanced with the establishment of a governmental space agency and subsequent development of a proactive space policy.
The propensity of states to breach internationally settled principles in the pursuit of self-interest undermine the pre-existing legal framework that underlies the international space environment. This is evident within the desire of states to prioritise the development of the Space 2.0 industry through recognising the right of commercial entities within their jurisdictions to pursue the extraction and ownership of resources in outer space, thus deriding the OST. Notably, the deficiencies of the 2015 United States Space Act  resided within its failure to implement a mechanism for avoiding and resolving disputes pertaining to space mining, and its recognition of a “fist-to-grab” methodology which recognises the rights of a US company over that of another state. This illustrates the legislative instrument as a means of solely incentivising US companies, while ignoring any potential wider political and legal conflicts that may arise. 
This was followed by the increasing militarisation of outer space by states through the development and deployment of ASAT weaponry. The ramifications of such militarisation could serve as a threat to the environment of outer space, and severely restrict future access to space for future generations;  given the potential development of a Kessler syndrome situation – a scenario where the density of space debris in low earth orbit is high enough that collisions between objects could result in a cascade, with the amount of space debris objects exponentially increasing. 
As revealed, the policy reasons supporting Australia’s creation of a space agency are numerous and varied, but may be condensed into three key reasons. First is economic gain, as there exists a significant opportunity for increased market share through guidance of the domestic space industry under an established governmental space agency. 
Second is national security, where the government could benefit from consolidating and defining Australia’s strategic space interests within a singular unified agency.  This would coordinate national decision-making and security, and facilitate communication and cooperation with other states’ agencies in promoting Australia’s interests.
Last is international prestige, as a space agency would play a pivotal role in upholding Australia’s image as an ideal/model international citizen and middle power.  An established space agency would facilitate the enforcement of international agreements domestically, uphold internationally recognised principles, and ensure active participation within international multilateral discussions and rule-making.
Australia may advance the liberal rules-based international order evident within international agreements such as the OST, and encourage multilateral discussions as to future possible amendments to the agreement. Australia already possesses the credentials for emphasising this contention as a party to the 1984 Moon Treaty,  advocating the banning of all exploration and uses of celestial bodies without the approval or benefit of other states under the “common heritage of mankind” principle of international law.   Australia may thus refine its middle-power status, and boost its diplomatic capabilities, through the formation of a governmental space agency.
Ultimately, the success of an Australian space agency may be qualified upon its creation, its measure of authority, its mandate to dictate space policy and national guidelines, its technical competence, allocation of a five-year budget, and signing of ten-year international agreements. While a review of the Space Activities Act  was announced by the Department of Innovation and Industry in October 2015, it remains to be seen whether the government will implement concrete amendments that will cement the creation of a space agency within a legislative instrument. 
Without resolute governmental leadership and guidance, Australia risks being left behind on the earth, while other states take to the stars.
By Jonathan Lim
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