Attachment A

 

Details of the Financial Framework (Supplementary Powers) Amendment (Industry, Science and Resources Measures No. 2) Regulations 2023

 

Section 1 - Name

 

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Industry, Science and Resources Measures No. 2) Regulations 2023.

 

Section 2 - Commencement

 

This section provides that the Regulations commence on the day after registration on the Federal Register of Legislation.

 

Section 3 - Authority

 

This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.

 

Section 4 - Schedules

 

This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedule to the Regulations.

 

Schedule 1 - Amendments

 

Financial Framework (Supplementary Powers) Regulations 1997

 

Item 1 - In the appropriate position in Part 1 of Schedule 1AB (table)

 

This item adds a new table item to Part 1 of Schedule 1AB to establish legislative authority for government spending on an initiative administered by the Department of Industry, Science and Resources (the department).

 

New table item 3 establishes legislative authority for the Government to acquire shares in Silicon Quantum Computing Pty Ltd (SQC).

 

SQC, launched in May 2017 is one of the world's leading companies developing a quantum computer. The Government will make an equity investment in SQC in 2023-24 to enable SQC to continue its work to develop a large-scale quantum computer in Australia, and to grow the Australian quantum ecosystem.

 

Quantum technologies have been identified as critical technologies in the national interest. The investment in SQC enables the continued development of what could be one of the first large-scale error-corrected computers in the world, helps grow the Australian quantum workforce, and contributes to an important national capability supporting Australia's security.

 

As an early-stage deep-tech company, private sector investment can be difficult to secure, creating a need for additional government investment. The investment from the Commonwealth in SQC is expected to leverage additional investment from other existing shareholders. The additional equity investment of $15 million in 2023-24 would support the Government's quantum technology policy objectives, including the implementation of the Government's National Quantum Strategy, as well as policy objectives on critical technologies. The reinvestment would ensure the company's intellectual property and workforce remain in Australia, retaining sovereign capability in a critical technology.

 

Quantum technologies are expected to enable a transformational shift in how Australians go about their daily lives, in areas as diverse as new medical discoveries, more accurate positioning and new clean technologies. By 2030, the Australian quantum sector could generate around 8,700 jobs, rising to 19,400 by 2045. The growth of the sector would also support employment across the wider economy, with a total investment impact of over 35,000 jobs by 2045 (Commonwealth Scientific and Industry Research Organisation, 2022; Centre for International Economics, 2022). For these reasons, among others, quantum technologies are identified as a critical technology in the national interest.

 

Quantum technology is also an enabling capability under the National Reconstruction Fund (an Australian Government Fund which helps secure Australia's future prosperity and drive sustainable economic growth through financing projects in priority areas to leverage Australia's natural and competitive strength), and an important element of the Government reaching 1.2 million tech-related jobs by 2030.

 

The arrangements will be conducted in accordance with the Financial Framework (Supplementary Powers) Act 1997 (FF(SP) Act) and the Public Governance, Performance and Accountability Act 2013 (PGPA Act). Relevant information about the Commonwealth's shareholding will be made publicly available on the department's website.

 

Funding will be committed by the Commonwealth through a contractual agreement to acquire shares in SQC and related investments. The Minister for Industry and Science (the Minister) will be responsible for approving the commitment of funding and the expenditure in accordance with the FF(SP) Act and the PGPA Act.

 

The investment will be managed by the Minister and the Commonwealth's Shareholder Representative for SQC, the Head of Division, Technology and Digital Division in the department. Information about the equity investment will be made publicly available in a media release following the conclusion of the capital raising round.

 

Funding decisions in relation to the equity investment are not suitable for independent merits review because they relate to the allocation of a finite resource, from which all potential claims for a share of the resource cannot be met. If another party were successful in seeking to overturn the original decision, the allocation made to SQC would be affected, and would adversely affect the company's business activities. The Administrative Review Council has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see paragraphs 4.11 to 4.15 of the guide, What decisions should be subject to merit review?).

 

In considering the equity investment, the Government consulted with the Chief Scientist Dr Cathy Foley AO PSM, within government, and with SQC. The Government also consulted with fellow shareholders.

Consultation on the equity investment beyond these stakeholders was not appropriate due to commercial sensitivities.

 

Funding of $15 million for the equity investment was included in the 2023-24 Budget under the measure 'Silicon Quantum Computing Reinvestment' for a period of one year commencing in 2023-24. This measure and its funding were not published in the Budget Papers due to commercial sensitivities at that point in time.

 

Funding for the item will come from Program 1.2: Investing in science, technology and commercialisation, which is part of Outcome 1: Support economic growth, productivity and job creation for all Australians by investing in science, technology and commercialisation, growing innovative and competitive businesses, industries and regions, and supporting resources.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the purpose of the item references the following powers of the Constitution:

*         the executive power and express incidental power, including the nationhood aspect (sections 61 and 51(xxxix)).

 

Executive power and express incidental power, including the nationhood aspect

 

The express incidental power in section 51(xxxix) of the Constitution empowers the Parliament to make laws with respect to matters incidental to the execution of any power vested in the Parliament, the executive, or the courts by the Constitution. Section 61 of the Constitution supports activities that are peculiarly adapted to the government of a nation and cannot be carried out for the benefit of the nation otherwise than by the Commonwealth.

 

The acquisition of shares in SQC is intended to support its nationally significant research and development activities in the field of quantum computing for the benefit of the nation.

 

Attachment B

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Framework (Supplementary Powers) Amendment (Industry, Science and Resources Measures No. 2) Regulations 2023

 

This disallowable legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the legislative instrument

 

Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) and to make, vary and administer arrangements and grants for the purposes of programs specified in the Regulations. Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programs. The powers in the FF(SP) Act to make, vary or administer arrangements or grants may be exercised on behalf of the Commonwealth by Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.

 

The Financial Framework (Supplementary Powers) Amendment (Industry, Science and Resources Measures No. 2) Regulations 2023 (the Regulations) amend Schedule 1AB to the FF(SP) Regulations to establish legislative authority for the Government to acquire shares in Silicon Quantum Computing Pty Ltd (SQC). The initiative will be administered by the Department of Industry, Science and Resources.

 

SQC, launched in May 2017 is one of the world's leading companies developing a quantum computer. The Government will make an equity investment in SQC in 2023-24 to enable SQC to continue its work to develop a large-scale quantum computer in Australia.

 

Quantum technologies have been identified as critical technologies in the national interest. The investment in SQC enables the development of what could be one of the first large-scale error-corrected computers in the world, helps grow the Australian quantum workforce and builds an important national capability supporting Australia's security.

 

Funding of $15 million for the equity investment was included in the 2023-24 Budget under the measure 'Silicon Quantum Computing Reinvestment' for a period of one year commencing in 2023-24. This measure and its funding were not published in the Budget Papers due to commercial sensitivities at that point in time.

 

 

Human rights implications

 

This disallowable legislative instrument does not engage any of the applicable human rights or freedoms.

 

Conclusion

 

This disallowable legislative instrument is compatible with human rights as it does not raise any human rights issues.

 

 

 

 

Senator the Hon Katy Gallagher

Minister for Finance