Take Australian taxpayers’ money, ship it overseas and build groundbreaking capabilities for foreign corporations to export around the world, all at the expense of Australian innovation and jobs. Rex Patrick reports on the quantum betrayal.
On April 30 this year, almost exactly a year after the Albanese Labor Government released its National Quantum Strategy “to grow the quantum industry in Australia,” Industry Minister Ed Husic announced we were shipping just short of a billion taxpayer dollars to a US Company, Palo Alto based PsiQuantum, to build a fault-tolerant quantum computer in Brisbane.
PsiQuantum has never built a quantum computer before—it was in the same place as other companies in the Australian industry. Injecting $1B into a US company so it can get ahead of the competition in an emerging growth market is hardly growing the quantum industry in Australia. It’s quite the opposite. The Government has given a leg up to a foreign corporation, which Australian industry then has to compete against.
It’s a big ‘F’ for the Albanese government – up there with pouring $10B of Australian taxpayers’ money into the US and UK submarine industrial base, giving our gas away for free and allowing foreign criminal enterprises to inflate housing prices with crooked money. I could go on.
AUKUS submarines “nation building” says Admiral. No they’re not, says Rex Patrick
Nothing to see here
If one paid just passing attention to this quantum computing procurement, you might think everything was in order.
The Government announced its National Quantum Strategy in May 2023, released an Expression of Interest in August 2023 for a fault-tolerant quantum computer to be built in Australia, and then, in May the following year, announced the winner: PsiQuantum.
But that’s not what happened. Senate orders for the production of government documents, Senate Estimates questions, and FOI requests have uncovered some disgraceful truths. This includes the FOI’s release to MWM this month.
It turns out the fix was in from the start.
The first interaction between the Australian Government and PsiQuantum appears to have taken place in May 2019, when Austrade met with the American Company. There were some discussions then, but more substantial interaction between the Australian Government and PsiQuantum commenced after the 2022 Federal election.
Prior to December 2022, PsiQuantum submitted an unsolicited proposal to the Government. It impressed the Minister for Science and Industry, Ed Husic, sufficiently to agree to further analysis.
In January 2023, Husic visited the firm’s facilities in Palo Alto, California. The visit brief, released recently under FOI, shows that the Government was already well committed to going with PSI even at that early point.
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Open in new tab For the remaining part of the first half of 2023, some due diligence in relation to PsiQantum was undertaken by the Commonwealth and the Queensland Government.
PsiQuantum binding discussions commenced in June 2023 with the Department of Finance being engaged and with Lawyers from King & Wood Mallesons hired in July 2023 for legal, commercial, probity and technical advice.
Fraud upon Australian industry?
At this point it looked like the Government was simply going to engage in single-sourcing a very significant contract to a foreign corporation. But then the Department set about engaging in a fraud upon Australian industry.
In June 2023, they started drafting the Expression of Interest (EOI) that was released in August 2023. The Department recently described the EOI’s purpose to the Senate:
“The EOI process tested the international and domestic quantum computing sector’s capability and interest to develop, build and operate a commercial-scale, universal fault-tolerant quantum computer in Australia by 2030 (and preferably earlier), and deliver a range of related benefits to strengthen Australia’s quantum sector and contribute to the national interest.”
Twenty-one companies devoted their time, money and efforts to respond. Many of them no doubt freely imparted their good ideas which will be used by government employees moving forward.
What they did not know was that the Minister and Department had already predetermined the path forward, and they were not to be involved in any significant way.
The EOI was both disingenuous and misleading. It was nothing short of disgraceful conduct.
Contract awarded, competitor born
On 30 April 2024 the Government announced their investment decision that PsiQuantum will establish its Asia-Pacific headquarters in Brisbane.
02 May 2024 Austrade, which is supposed to accelerate the growth of exports and attract foreign investors, issued a press release celebrating the contract, the growth of an importer, and the expenditure of taxpayer funds.
The Australian Government has injected a billion dollars into a foreign company that will forever compete with the Australian IT industry. It has engaged in a direct betrayal of Australian companies in the sector, tantamount to treason on our high-tech future.
Why did the Albanese Government do this? The decision almost certainly went to the very top of the government. Why did they betray and mislead Australian industry and our national interest? That’s a tale yet to be fully unravelled. It’s unlikely to be a very good story.
Why pay $1m when you can pay PwC $30m, and help yourself to free IP?
Rex Patrick is a former Senator for South Australia and earlier a submariner in the armed forces. Best known as an anti-corruption and transparency crusader - www.transparencywarrior.com.au.