PsiQuantum’s $1bn deal under threat as Queensland’s LNP government launches funding review

A controversial $1bn deal at the centre of Anthony Albanese’s Future Made in Australia agenda faces collapse as Queensland’s new LNP government reviews the state’s financial stake in building a world-first super computer.

The new LNP government headed by, from left, Deputy Premier Jarrod Bleijie, Premier David Crisafulli and Treasurer David Janetzki. Picture: Lyndon Mechielsen/Courier Mail

A controversial $1bn deal at the centre of Anthony Albanese’s ­Future Made in Australia agenda faces collapse as Queensland’s new Liberal National Party government reviews the state’s financial stake in building a world-first super computer.

After raising concerns about the secrecy surrounding the ­taxpayer-funded handout to US-based start-up PsiQuantum, The Australian can reveal the Queensland government is now considering revoking its $470m investment in constructing a fault-tolerant quantum computer in Brisbane.

In what is shaping up as the first fight between the federal Labor government and Queensland’s new LNP administration, Treasurer David Janetzki on Monday refused to guarantee the state would stump up its half of the funding that was promised by former premier Steven Miles.

Earlier this year the Labor-led Queensland and federal governments awarded almost $1bn worth of taxpayer-funded grants, loans and equity to PsiQuantum to build the world’s first commercially viable quantum computer.

In one of his first acts as Queensland Treasurer, Mr Janetzki will haul state department officials into a briefing this week to detail the inner workings of the PsiQuantum deal, before the state government decides whether to axe its $470m contribution.

The Australian understands Mr Janetzki will seek clarity on what due diligence was undertaken by the previous Labor government, as well as the state of contractual arrangements before making a final funding decision in coming weeks.

“We know that PsiQuantum had the inside running with the current federal and former state government,” Mr Janetzki said. “Throughout the year we have raised our concerns about the complete secrecy of the tender process and the way it sidelined expert advisers. We will examine the details of this deal in full.”

The Silicon Valley-head­quartered firm, which has Australian-born co-founders, secured funding from the Albanese and Miles governments in April after hiring Labor-aligned lobbyists and consultancy firms to help facilitate the deal. It also followed a secretive expression of interest process that industry sources have suggested was ­designed to favour PsiQuantum.

Mr Janetzki has previously raised concerns in parliament about whether the proposed PsiQuantum computer would be too expensive to operate and that the deal was “dripping with Labor lobbyists … and a lack of ­accountability for half a billion dollars to the Queensland taxpayer”. During an estimates ­hearing in July, he quizzed then-treasurer Cameron Dick and ­former under treasurer Michael Carey about the nature of the deal. “PsiQuantum has essentially reached out to the Queensland government as it has failed to attract private capital,” Mr Janetzki said at the hearing.

“The tender process has been conducted in complete secrecy, it sidelined expert advisers, it forced firms to sign NDAs (non-disclosure agreements) and there are questions as to even the cost to ­operate qubits, even if the technology is successful. Against this backdrop, is handing over nearly $500m in taxpayer value to this private company defensible, or frankly is it simply speculative?”

When the funding was announced in April, Mr Miles said the quantum investment would bring “billions in economic opportunity to Queensland, which will deliver thousands of high-paying tech jobs and the chance for Queenslanders to work in careers that will change the world”.

Mr Janetzki has questioned whether the 400 touted new jobs would be “American jobs or Australian jobs”. The federal Coalition has also expressed concerns about the investment and called for a parliamentary inquiry. Science spokesman Paul Fletcher last month described the deal as a “captain’s pick, with a reverse-­engineered process designed to benefit one American company”.

Federal Industry Minister Ed Husic ­has acknowledged PsiQuantum would own the computer once it was successfully built, which is slated to be operational by the end of 2027, but that Australia would get access to its computing power “for what we need or what industry needs”.

He has also trumpeted the quantum computer as the “tech edge that we need to drive future growth in productivity”.

Asked if Mr Husic had spoken to Mr Janetzki about funding ­­arrangements for PsiQuantum or been given assurances about Queensland’s contribution, a spokeswoman for the minister said: “The Albanese government is working constructively with the new Queensland government on a range of issues.”

PsiQuantum has signed agreements with five Queensland universities since the funding agreement was announced, and opened a new lab at Griffith’s Nathan Campus. The Australian in September revealed PsiQuantum’s funding was tied to strict milestones and reporting requirements, with taxpayers officially becoming “shareholders” in the firm’s next capital round.

The Albanese government’s funding forms part of its Future Made in Australia manufacturing agenda and consists of an equity investment of $189.5m, with the remainder of the $470m comprising debt. The former Miles Labor government had a similar arrangement, with a conditional $200m construction and term debt facility, and conditional $75m economic development and credit support facility.