MEDIA RELEASE - LABOR'S $1 BILLION PSIQUANTUM DEAL IN DISARRAY

PAUL FLETCHER MP

Shadow Minister for Government Services and the Digital Economy

Shadow Minister for Science and the Arts

Manager of Opposition Business in the House

MEDIA RELEASE

Friday, 15 November 2024

LABOR’S $1 BILLION PSIQUANTUM DEAL IN DISARRAY

The Albanese Labor Government’s management of a $1 billion contract with tech company PsiQuantum is in disarray, following revelations that key milestone activities have not been met. 

Under questioning from the Opposition, it was revealed in the most recent Senate Estimates hearing that, since the funding was first announced in April this year, federal loan funding of $275 million has not yet flowed to the American-based business. 

Senior officials from the Department of Finance and Export Finance Australia confirmed that PsiQuantum have not yet meet the conditions to receive the $275 million in the form of two loans, but would not state what those conditions are, keeping the conditions cloaked in secrecy.

Separately, even though the equity payment of USD$125 million has been issued as a convertible note, it is yet to be converted into equity because a range of conditions have not yet been met.  Senior officials from the Department of Finance confirmed that one of those conditions is that PsiQuantum is required to undertake a private capital raising round.  More than six months after the announcement, PsiQuantum has not yet raised the requisite capital. 

During the Department of Industry, Science and Resources hearing, officials admitted that the deal’s “technology pathways are uncertain.” 

During the Export Finance Australia hearing, officials said the Australian Government has already written of a loss in relationship to the transaction, but failed to reveal how much has been written off. 

Shadow Minister for Science Paul Fletcher said the new revelations raise fresh concerns over the already controversial deal. 

“The Albanese Labor Government’s big risky bet on one American company is looking shakier and shakier by the day,” Mr Fletcher said. 

“Nearly $1 billion of taxpayer funds were committed to this uncertain project by the Albanese and Miles Labor Governments in a transparent attempt to buy votes. 

“In contrast to the studied silence of his Cabinet colleagues, Ed Husic has given repeated assurances that everything about this secret deal is above board. 

“Alarm bells should be ringing given key financial milestones haven’t yet been reached, putting the project under a cloud.

“A parliamentary inquiry is needed to find out what went wrong. Ed Husic says he welcomes more scrutiny of this deal, and an inquiry would allow him to honour his word. The Coalition will continue to press for such a review.”