Government axes $7bn satellite program, 18 months after big announcement due to ‘evolving threats’

The Federal Government will cancel a $7bn multi-billion-dollar military-grade satellite communications program announced only 18 months ago, due to “evolving threats in space”.

Despite only announcing last April that Lockheed Martin had been granted the tender to deliver what would have been the most significant sovereign space project in Australian history, Defence has confirmed the project will be canned, saying it no longer meets the ADF’s needs.

The project, known as JP9102, was given a 10-year budget of between $5.2 and $7.2bn to build a system of geostationary communication satellites that would have created an impenetrable data network across the military.

In a statement, Defence pointed to the “acceleration in space technologies and evolving threats in space” over the last 18 months as the basis on which it had assessed a “single orbit geo-based satellite communications system would not meet strategic priorities”.

“As such, Defence has decided to cease its current procurement activity with Lockheed Martin,” the statement said.

“Instead of a single orbit solution, Defence must instead prioritise a multi-orbit capability increasing resilience for the Australian Defence Force.

“Defence’s current satellite communications capabilities support the immediate needs of the organisation. This decision allows Defence to prioritise emerging needs, mitigate capability gaps and continue to support our transition to an integrated, focused force.”

The Coalition’s defence spokesman Andrew Hastie said the cancellation of the project “devastates our capabilities in strategic overwatch and our ability to coordinate our future defence force”.

In announcing the project last year, Defence said the satellite system would include new Defence controlled and operated geo-stationary communication satellites that would have created an impenetrable data network across the military.

The project was also set to build multiple ground stations across Australia, an integrated management system, and two new operations centres.

Head of air defence and space system division Air Vice-Marshal David Scheul said at the time the project would be a game changer for the nation’s sovereignty.

“Currently across Defence there are up to 89 capabilities which depend on satellite communications,” Air Vice-Marshal Scheul said.

“Once delivered, the new system will increase the resilience, agility and flexibility of Defence’s military satellite capability.”

Defence funding was set to hit a record $55.687bn in 2024-25, and up to $67.393bn by 2027-28.

Comparatively, the 2023-24 defence budget was $53.331bn.

In handing down his Budget in May, Treasurer Jim Chalmers said investing in “modern defence industries serves our economic and national security interests”.

“That’s why we’re injecting $50.3 billion over the decade to deliver the capabilities we need to keep Australians safe — as part of the National Defence Strategy,” he said at the time.

Defence officials and the Government are set to be questioned over the cancellation during Senate Estimates hearings this week.