Federal Labor has promised to base the headquarters of the new Australian space agency in Canberra with "nodes" in the states and territories, if it wins the next election.
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Senator Kim Carr will also warn against the bidding war arising between the states for the agency, in a speech at the Australian Strategic Policy Institute's Building Australia's Strategy for Space Conference in Canberra on Friday.
Former CSIRO boss Dr Megan Clark will be the head of the new agency when it is created in two weeks.
Jobs minister Michaelia Cash revealed at the conference on Thursday the agency would be based in Canberra for one year, not six months as originally foreshadowed.
States including Victoria, NSW and Western Australia have already begun vying to become the permanent home of the new agency, and Senator Cash said she'd been "extremely encouraged" by their interest.
“I look forward to Dr Clark beginning her consultation shortly with each state and territory, one on one to properly ascertain what they can bring to the table," Senator Cash said.
"At the conclusion of this process, which we’re aiming for before the end of the year, Dr Clark will advise of the most strategic arrangements for the agency’s long term location."
But Senator Carr, who is Labor's spokesman for innovation, said while he wanted the states to maintain their interest, the burgeoning bidding war was counterproductive.
He accused the Turnbull government of playing the states off one another for political gain, at the expense of the national interest.
"The agency’s task is much greater - nothing less than the establishment of an Australian space industry," Senator Carr is expected to tell the conference on Friday.
"This is a nation building undertaking with profound international implications."
About 2000 of the 10,000 space industry jobs in Australia are in Canberra, with a review of Australia's space capability last year showing a considerable level of private and public space infrastructure in the ACT already.
This includes the Canberra Deep Space Communication Centre, the super computer at the Australian National University, the Advanced Instrumentation and Technology Centre and EOS laser ranging telescope at Mt Stromlo, as well as the Concurrent Design Facility and Falcon telescope at UNSW Canberra.
Labor promised $35 million in March to create an Australian Space Industry Program, to which the Canberra-headquartered Australian Research Council would have been central.
Other Commonwealth agencies dealing with space, including Geoscience Australia, the CSIRO and the Bureau of Meteorology, are also based in Canberra.
But Senator Carr said Australia's lack of national space capability left the country vulnerable, both militarily and economically.
"We particularly need to develop our sovereign capability so we're not dependant on other countries in times of crisis. That's exactly the problem we have at the moment," Senator Carr told Fairfax Media.
"Australia is more dependant on spatial technology than any other country. Everything from finance to traffic management system is dependent on spatial technologies.
"We need to develop independent capability to ensure our national interest is not subjugated to other national interests."
He said the new agency's role should be to leverage existing activity in the sector by developing partnerships between the private sector, universities and federal scientific agencies, without stripping bodies like the CSIRO of funding.
Senator Carr said while the Labor would base the agency in Canberra, it would not mean "launch facilities in Fyshwick".
"This is the national capital and this is a nation-building mission," he said.
"Canberra is required because there are over 90 separate programs currently operating across the Commonwealth alone with expenditure that runs into the several billions of dollars.
'That requires coordination nationally and internationally, and can't be done at a state level in a way other than to add to the confusion."
The commitment is likely to attract bilateral support in the ACT.
Mr Barr has also said it would be "counterproductive" for the ACT to become embroiled in a bidding war we were not going to win with jurisdictions that had "budgets that are 15 or 20 times larger than us".
