Op-Ed - The Weekend Australian, 3 August 2024 - Labor’s big bet on US quantum firm does not compute

Australia has built real scale and expertise when it comes to a technology that will be critical to the future of information technology: quantum computing.

Silicon Quantum Computing, Q-Ctrl, Quantum Brilliance and Diraq may not be household names, but they have established themselves as globally credible businesses, attracting talent and investment from around the world.

Building on fundamental research in physics and related disciplines at Australia’s leading universities, these companies are well positioned to turn that research into commercially viable hardware and software.

There is a global race to get quantum computing out of the lab and into the marketplace, with multiple different approaches and techniques being pursued. The market opportunities for those who win this race are enormous, with this technology expected to be rapidly and enthusiastically taken up in a wide range of uses including drug discovery, financial services and defence.

The Australian players in this space are competing against an array of well-funded start-up businesses around the world, as well as global IT heavyweights such as Microsoft and Google.

In recent years both sides of politics have recognised the potential of the Australian quantum sector, and supported the leading Australian companies and researchers with government funding.

Sadly, momentum has been lost over the past two years, with the Albanese Labor government telling the Australian quantum sector there were no specific funding programs for quantum.

That was before it announced a truly bizarre decision on April 30: a funding commitment of almost one billion dollars, jointly with the Queensland Labor government, not for one or more of the Australian-based quantum companies, but instead for a company incorporated in the United States and based in Silicon Valley.

Industry and Science Minister Ed Husic’s decision to fund American company PsiQuantum has dismayed and discouraged our local quantum sector.

The Coalition has scrutinised this decision since it was first announced.

We have found out a good deal through Senate estimates and Freedom of Information requests, but Labor has tried to keep as much secret as it can. Yet already enough has been revealed to raise very serious questions. We now know Labor gave PsiQuantum a head start by entertaining an unsolicited proposal from the company as early as December 2022. 

This was long before the government held an expression of interest process, which did not open until August 2023. It was also well before the Albanese government released its National Quantum Strategy in May 2023. We now know the exercise of developing and publishing this strategy was a sham.

By the time the so-called National Quantum Strategy was issued, Minister Husic had already decided what his quantum strategy would be. He was going to place one big bet on one particular American company. And it was not just the strategy that was a sham; so too was the EOI process, again because Husic had already decided the money was going to PsiQuantum. 

Why else did he decree that EOI participants would be given only four weeks to make submissions when PsiQuantum had been in discussions with the government for some eight months? 

Why else was Export Finance Australia already working with the Department of Industry on funding for PsiQuantum even before the EOI assessment was finished?

It looks very much like a process was reverse-engineered to cover up the tracks of a decision that had been made months before.

From the moment it was announced, this deal had all the indicators of a commercially naive minister bedazzled by a slick pitch, who had failed to secure the most basic commitments from PsiQuantum as to what Australia and Queensland would actually get from this investment.

We have been promised a new building in Brisbane housing a large-scale quantum computer – but the semiconductors that are the heart of the computer will be made not in Australia but in Germany and in the United States.

And the scale of commercial naivety now looks even greater, following last month’s announcement from PsiQuantum and the government of the US state of Illinois. Illinois will provide $US500m ($767.4m) in economic incentives for PsiQuantum to build a quantum computer in Chicago.

 So for all the money Husic threw at PsiQuantum, he did not even succeed in getting exclusivity; instead the company is free to do similar deals with governments around the world.

Fifty years ago another Labor minister with big dreams and limited commercial experience fell for a Pakistani huckster named Tirath Khemlani. On all we have learned so far, it looks very much as if Ed Husic is the Rex Connor of the quantum computing era. 

This captain’s call looks to have been made in violation of normal principles of good governance, competitiveness, accountability and transparency.

The information the Coalition has obtained so far is very troubling; there is a clear need for a full investigation of what has happened here. 

That is why I have written to the Auditor-General, requesting that the Australian National Audit Office undertakes an investigation into this flawed funding decision and the process that led to it. 

The Albanese government and Ed Husic have consistently failed to give clear and comprehensive answers to the many serious questions raised by this most unorthodox and irregular decision.

It is essential that the ANAO urgently commence a full investigation so taxpayers can know the truth.

Paul Fletcher is the shadow minister for science