Nature, from grasslands to bushlands to coastal waters,  underpins industries that contribute at least $138 billion annually to the Australian economy (equivalent to 5.3% of GDP). This value to the economy grows to $511 billion when including essential non-market services such as recreation and carbon sequestration.  Nature is a central pillar of Australia’s economy, supporting around 20% of GDP, matching the combined output of the finance and mining sectors. 

This first-of-its-kind analysis by Cyan Ventures and commissioned by the 30 by 30 Alliance, Nature Economics: Analysis of the case for Australian Government investment in nature puts hard numbers on Australia’s most undervalued economic asset.

It also clearly sets out the stark lack of investment by the Federal Government. 

Federal biodiversity funding has averaged just $476 million annually over the past decade, rising to $726 million in FY24 but still only 0.1% of the Federal budget.  On a per-square-kilometre basis, Australia spends up to 219 times less than countries like Denmark and Switzerland whilst managing vastly larger, more fragile landscapes.

The analysis also shows that the Government could lift this to 1% by redirecting a portion of existing disaster recovery funds and reforming negative subsidies such as the fuel subsidy. This would raise more than $3.4 billion annually for nature-based solutions without increasing overall spending and would be strategic risk management of a critical asset, also boosting current annual labour productivity growth by over 40%.

Dr Fraser Thompson, Managing Partner of Cyan Ventures said: “Nature isn’t just ‘nice to have’; it’s a critical economic asset.

“From an economic risk perspective the Australian government is under-insuring one of its most valuable assets. This is an economic number that cannot be ignored: a potential $58 billion black hole in the budget is a stark reminder of what’s at risk.

“We have seen this most recently with the South Australian algae bloom where underinvestment in nature has been a wrecking ball for industries such as commercial fishing and eco-tourism. 

“For years, numerous reports have been sounding the alarm about Australia’s ecosystem collapse. The Government’s own State of the Environment Report paints a stark picture of Australia’s nature in crisis, warning it’s ‘poor and deteriorating’.

“Nature’s continued deterioration will be a drag to our economy, productivity, and budget. But it’s not too late to reverse this trend with the right investment.  

“Our analysis shows that by investing just 1% of the Federal Budget in nature, we could boost Australia’s annual productivity growth by over 40% — that’s an economic return that rivals the most effective pro-growth reforms.

“It’s time to treat nature as the economic powerhouse it is and fund it accordingly.”

Sally Townsend, Head of Sustainability at Blackmores said: “Nature is at the core of our supply chain and product innovation. Degradation of ecosystems isn’t just a sustainability risk — it’s a business risk. Protecting and restoring nature safeguards the very foundation of our industry and many others.

 “Strategic, long-term investment in nature would not only protect our biodiversity but also strengthen our economy and safeguard industries.

 “Nature’s contribution should be more visible in balance sheets and investment decisions to protect the ecosystem services we all depend on.” 

Tim Nicol of the Pew Charitable Trusts said:

“Nature and the economy are intrinsically linked. From fisheries to farming, from tourism to health, our prosperity depends on healthy ecosystems. We need to start treating investment in nature the same way we treat investment in infrastructure.

“Addressing nature’s degradation would provide clear economic co-benefits to productivity, climate change mitigation and adaptation, and mental and physical health.

Key facts from the report

• Nature contributes up to 20% of Australia’s GDP when indirect benefits are counted.
• Industries such as agriculture, tourism and fisheries are heavily dependent on healthy ecosystems, especially in regional Australia.
• Taxes collected from nature-based industries and environmental taxes are estimated to have contributed $58 billion to the Australian budget in FY22.
• Federal nature spending would need to be 5.5 times higher to match international “insurance” benchmarks.
• Strategic investment in nature could significantly reduce future disaster recovery costs, improve public health, and strengthen Australia’s climate resilience.
• Increasing spending on nature could boost current annual labour productivity growth by over 40%.

Direct Value	$138 billion annually	5.3% of GDP (equivalent to manufacturing)
Indirect Value	$511 billion	20% of GDP (equivalent to mining and financial services)
Revenue from nature industries	$58 billion
Current spending	0.1% of budget at $476 million
What is needed to protect the economic benefits of nature	1% of budget at $3.4 billion would boost current labour productivity growth by over 40%