Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Link to this | Hansard source

I take this opportunity to speak about a controversial investment decision made by the Albanese Labor government which raises serious questions. This is Labor's decision to invest almost $1 billion of taxpayers' money into the American company PsiQuantum. This deal has been cloaked in secrecy from the beginning, with the Albanese Labor government and the Minister for Industry and Science, Ed Husic, going to great lengths to avoid scrutiny and transparency. It is clear, though, on the available evidence that this investment does not meet the normal standards of contestability, fairness and probity that would be expected from a funding decision of this size.

According to Minister Husic, there's nothing to worry about. In the Weekend Australian recently he said:

We put the proposal through an exhaustive assessment led by the public service and complemented by technical, legal, commercial and national security experts.

Sadly, this perspective is not shared by many in Australia's quantum sector, nor is it supported by the evidence that the opposition has been able to gather through Senate estimates processes and freedom of information requests. What we've learnt is troubling. The Albanese government agreed to assess an unsolicited proposal from PsiQuantum as early as November 2022, nine months before the expression of interest process opened and six months before the National Quantum Strategy was released. The Department of Industry, Science and Resources entered into a non-binding agreement with PsiQuantum in June 2023, two months prior to the expression of interest process. All of this suggests that the expression of interest process was a reverse-engineered sham designed to cover up the reality that Minister Husic had already made his decision.

I have written to the Auditor-General requesting that the Australian National Audit Office undertake an investigation into the Australian government's investment in PsiQuantum. I've asked a series of questions. Why did the government decide to make the investment in response to an unsolicited proposal from PsiQuantum? When did interaction occur between the minister's office and PsiQuantum's venture capitalist executives and lobbying firms, and what was the nature of that interaction? Why was the national interest framework not used in arriving at this decision? When did the government reach its decision to make this investment? How did the government assess PsiQuantum's claims, including but not limited to PsiQuantum's technology being able to deliver at scale in the timeframe that PsiQuantum claimed? Why did the government not, instead, decide to establish and announce a program to fund investments in quantum companies with publicly announced guidelines and invite any interested company to put forward an application to be assessed against the guidelines?

Had the government reached its decision to make the investment prior to conducting the expression of interest process? Why did government officials advise companies other than PsiQuantum prior to the EOI that there was no dedicated funding available for Australian companies? Why did the government carry out extensive engagement with PsiQuantum prior to conducting the EOI process? Why was the EOI process secret and not publicly announced? Why was the EOI conducted through the sending of a single email, with no follow-up by the department to even ascertain whether the recipients of the email had seen it and opened it? Why were the EOI participants given only four weeks to prepare and provide their response when PsiQuantum had been given a period of some nine months to develop its proposal and to engage in extensive discussions about the proposal with the Australian and Queensland governments? Why were the companies which participated in the EOI process not given the same opportunities as PsiQuantum for direct engagement and discussion with Australian government officials and representatives up to and including the Minister for Industry and Science? Why were the companies which participated in the EOI process not given the same opportunities as PsiQuantum for direct engagement and discussion with Australian government officials and representatives up to and including the Minister for Industry and Science? Why were the companies which participated in the EOI process specifically directed, as a term of participating, that they could not directly approach nor speak with Australian government officials? Were the terms of the EOI biased towards PsiQuantum's technology and claimed delivery dates? How did the government assess the value for money of the EOI proposals and PsiQuantum's proposal? What criteria and weighting were used? Was the negative impact on the Australian based quantum companies considered when allocating funding to a United States company? Why was a technology agnostic expression-of-interest process not considered at the start of the process? Why was the EOI limited by the requirement to deliver a quantum computer at the earliest possible time only, rather than considering a weighted assessment of time to deliver, amount of local supply chain production in Australia, likelihood for the technology to be approved, upscaled and delivered on the proposed timeframe, capability usefulness, total investment required and amount of funding remaining in Australia? Did EOI applicants receive a fair process in terms of application and assessment? Was it a foregone conclusion, given the terms of the EOI, that the funding would go to PsiQuantum and that none of the companies invited to participate had any real or serious chance of being selected through the EOI? Why was Export Finance Australia directed to commence work on the investment into PsiQuantum before the EOI had concluded? Was the EOI nothing more than a sham?

How did the government satisfy itself that the optimal path to support the quantum computing sector in Australia was to invest a large amount in one company and in one technology, and how was that company and that technology selected? Why did the government not choose to make smaller investments across a range of companies, consistent with the approach being used by a range of other governments? Why was a test bed not considered? What initial and subsequent advice did the department and the Chief Scientist provide to the minister's office on the draft and final versions of the National Quantum Strategy and regarding providing funding for PsiQuantum?

Did Minister Husic's senior adviser, Ellen Broad, have a conflict of interest, given that she has a close personal friendship with a senior Blackbird employee, Kate Glazebrook, and given Blackbird is an existing investor in PsiQuantum and given the investment would likely have increased the value of Blackbird's existing holding in PsiQuantum? Did Minister Husic take appropriate steps to recognise and manage the actual or perceived conflict of interest faced by his senior adviser, Ellen Broad?

Was the decision to make the investment influenced by the fact that PsiQuantum engaged as its lobbyist the firm Brookline Advisory, whose partners included Lidija Ivanovski, a former chief of staff to current defence minister Richard Marles, and Gerard Richardson, a former senior adviser to current Treasurer Jim Chalmers? Was the decision to make the investment influenced by the fact that Minister Husic's senior adviser, Ellen Broad, has a close personal friendship with a senior Blackbird employee, Kate Glazebrook, and given Blackbird is an existing investor in PsiQuantum? Was the decision to make the investment influenced by the fact that a senior Blackbird executive, Kate Glazebrook, was appointed to advisory boards by Minister Husic, and Blackbird is an existing adviser in PsiQuantum?

Curiously, in response to my letter, Minister Husic has made the public statement that he welcomes further scrutiny and welcomes a review being conducted by the ANAO. His words were, 'Bring it on.' On this point, I agree with Minister Husic; let's bring it on. The fact is that taxpayers deserve and are entitled to a root-and-branch review of this deal to ensure it meets the relevant standards. The fact is that Labor has made a big and risky bet with taxpayers' money. The evidence suggests we have a minister who has arrived at a personal decision, having met PsiQuantum, having had a number of direct one-on-one meetings with PsiQuantum's senior executives and having visited PsiQuantum at its facilities in Silicon Valley in January 2023. All the evidence suggests that, as a consequence of this sequence of events occurring, the minister has arrived at a personal view that it would be an excellent idea for the Australian government, jointly with the Queensland government, to invest almost $1 billion of taxpayers' money into this company. Taxpayers deserve to know whether this is in fact what happened, and they also deserve to know why it is that the normal safeguards and processes which apply to funding of this kind and certainly of this scale do not appear to have been followed. Taxpayers deserve to know why it is that a senator official, the deputy secretary of the department of industry, subsequently left the department of industry, was on leave of various kinds for 12 months and then turned up in another department at first assistant secretary level. Is it true, as some have suggested, that this was a consequence of him providing advice that Minister Husic did not wish to hear, when he briefed against the advisability of this investment?

The evidence points overwhelmingly to a captain's pick being made. This government has let its enthusiasm get ahead of its judgement and, as a result, exposed the Australian taxpayer to large and unnecessary risk. Australians deserve better, and I again call on the ANAO to conduct a full investigation.