The federal Opposition has demanded that government explain its use of Australia’s export credit agency to bankroll Cailfornia startup PsiQuantum’s plans to build the world’s first fault-tolerant quantum computer.
Shadow science minister Paul Fletcher has written to Export Finance Australia (EFA) seeking to clarify its role in Canberra’s controversial bet on the US-based quantum computing firm.
It comes as new details of the transaction emerge showing the $463 million in equity and loans provided by the Commonwealth through the EFA will flow entirely to the United States.
Using three transactions, the equity ($188 million) and loans ($275 million) will be paid to PsiQuantum Pty Ltd and PsiQuantum Corporation, both of which are based in the US, according to the EFA’s transaction register.
PsiQuantum, which is planning to have its Brisbane manufacturing and production facility up and running by the end of 2027, is a registered company in Australia and has set up its local headquarters in Brisbane’s Gold Triangle business district.
The loan has been split into two transactions – one for $200 million and the other for $75 million – and will flow to PsiQuantum Pty Ltd, matching Queensland’s loans to the company.
As revealed by InnovationAus.com last month, Queensland’s investment comprises a conditional $200 million construction and term debt facility and a conditional $75 million economic development and credit support facility.
Mr Fletcher, who has questioned the government’s “obsessive secrecy” over PsiQuantum since early on, told InnovationAus.com that while information is “slowly being drip fed” out, several “crucial questions remain unanswered”.
“The EFA is meant to finance Australian exporters and overseas buyers of Australia goods and services. It remains unclear how investing taxpayers’ money in a US-based company who will then reinvest it in Australia falls within the agency’s remit,” he said.
Mr Fletcher has asked the EFA a series of questions to “clarify its role and suitability to the transactions, including whether it undertook any analysis on the “probability that PsiQuantum is unable to deliver an operational quantum computer”.
“If PsiQuantum is unable to deliver an operational quantum compute, what is the maximum amount EFA (and in turn the Australian taxpayer) could lose as a result of the transaction,” he put to the agency.
PsiQuantum’s loan was the largest through Export Finance Australia last financial year, with a $218 million loan guarantee for the Hai Long offshore wind project in the Taiwan Strait the next closest.
According to the agency’s most recent annual report, total exposure through the National Interest Account was $3.5 billion at the end of June 2023, with the largest investment in Telstra (US$1.8 billion).
Mr Fletcher has also asked for details about the loan, including its interest rate, whether equity payments will be made in stages and are “contingent on PsiQuantum achieving particular milestones”, and if the government will receive ownership over IP.
“The commercial arrangements are still unclear, and we need to know whether EFA will have a stake in this deal. How many Australian based companies will miss out on EFA financing due to this deal being prioritised?”
EFA officials told Senate Estimate last month of plans to release further details within eight weeks – the same approach it takes with all other transactions through the National Interest Account.
“These are highly complex transactions, and often we will need that time to make an accurate assessment of the information that we put out in the public,” EFA managing director and chief executive John Hopkins said.
The National Interest Account is an investment vehicle that, at the direction of the Trade and Tourism minister, can be used to support transactions deemed to be in Australia’s national interest.
The government plans to expand the remit of the National Interest Account through the Future Made in Australia Bill to provide additional avenues to finance projects in the national interest.
The EFA became involved in the government’s non-binding, commercial discussions with PsiQuantum as they intensified in September last year – the same month that a ‘secret’ quantum computing EoI closed.
The EoI called for 21 firms to offer information on the prospect of a “commercial-scale university fault tolerant quantum computer” being developed in Australia, “ideally by 2030, and preferably earlier”, without disclosing the PsiQuantum talks.
“The timeline of events make it appear that this investment was a captain’s call, with Labor using as many government levers as possible to make it happen,” Mr Fletcher said, echoing similar comments by independent MP Monique Ryan and former independent senator Rex Patrick last month.
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