Qld dismisses deficit fears, promises continued biotech support

A spokesman for Queensland Premier Peter Beattie yesterday dismissed fears that a $486 million operating deficit in accrued accounts this financial year will affect funds promised for biotech projects.

The deficit, which will be outlined in the State Budget due out next Tuesday, is "entirely attributable" to the downturn in world markets, according to State Treasurer Terry Mackenroth. The rate of return on approximately $13 billion managed by the Queensland Investment Corp will "probably be zero per cent."

In terms of a cash position, the State will still record a 2001-02 surplus of approximately $382 million, Mackenroth said.

Beattie press secretary Steve Bishop said the deficit would not affect a $100 million biocapital fund currently being structured by the QIC, nor other funding commitments to biotech.

The monies will remain committed because the government views biotech investment as an essential ingredient in the state's economic future, he said.

The point has been underscored by announcements of a $70 million health research institute at the Queensland University of Technology and $6 million in funding for a cryo-electron microscope facility and supercomputer equipment at the University of Queensland.

Construction of the new health research institute to conduct studies into health and biomedical science will begin almost immediately aided by a $25 million investment from the State government.

Cash injection

Also brightening the investment picture is the revelation by the venture capital arm of a major Canadian bank that it will contribute $40 million to a biotech fund being filled by Brisbane-based fund manager CM Capital Investments.

The injection by CIBC World Markets is part of a $150 million fund due for closure next year and was labelled "great news" for the biotech industry by CM Capital's partner in charge of biotech, Dr Carrie Hillyard.

Meanwhile, the latest focus of Beattie's relentless campaign to entice biotech investors into the State is an $150 billion Hong Kong mega-group.

Beattie has invited senior executives of the Cheung Kong Group - which recently made sizeable biotech investments in the UK - to site clinical trials and R&D work in Queensland.

The diversified group has invested more than $US3 billion in Australia over the past three years in energy and infrastructure projects.

Its biotechnology interests include collaboration with research and development institutions in cancer research and drug development through the group's subsidiary, CK Life Sciences International Inc.

Beattie said he was urging the group's senior executives to consider Queensland as a preferred destination for their biotech initiatives.

Deputy managing director HL Kam expressed an interest in biotechnology applications in environmental remediation, wastewater treatment and other quality of life areas, Beattie said.

The Cheung Kong Group is also interested in working with cane growers in regard to an environmentally friendly fertiliser called NutriSmart, known as Eco-fertiliser in Australia, he said.