A biomedical scientist involved in breakthrough treatments of spinal cord injuries was named 2017 Australian of the Year at a ceremony in Parliament House, Canberra, on Wednesday night.

Queenslander Emeritus Professor Alan Mackay-Sim is an international leader in stem cell research and his work played a central role in the world's first successful restoration of mobility in a quadriplegic man in 2014.

In his speech, he called for Australia to prioritise our spending "so that we can afford not only to look after the disabled and the diseased in our community, but to look at future radical treatments that will reduce future health costs".

Others honoured at the ceremony, hosted by Prime Minister Malcolm Turnbull, include Senior Australian of the Year Sister Anne Gardiner, a member of the Daughters of Our Lady of the Sacred Heart and a school principal, who, for 62 years, has devoted her life to "enriching community, enhancing opportunity and supporting the Tiwi culture" on Bathurst Island off the Northern Territory coast.

Vickie Jellie, from Warrnambool in Victoria, was named Australia's Local Hero for her work in fundraising to bring radiotherapy services to the state's south-west following the death of her husband Peter from cancer in 2008. And the Young Australian of the Year was named as 26-year-old fashion designer and entrepreneur Paul Vasilleff, of South Australia.

Ben Roberts-Smith, chairman of the National Australia Day Council, said all four are "Australians we can all be richly proud of and inspired by".

“They have all made valuable contributions – to medical science and their communities, by creating jobs and keeping heritage and culture alive, and through helping others and creating a better future," he said. “They remind us to dream big, work hard and believe in what you’re doing.”