Wizofaus makes some good points.

1. "increasing government input into economy-building, but done at a more abstract level: more funding for education, training and infrastructure, and in particular for scientific research of the sort that is likely lead to long-term benefits for entire industries, or groups of industries."

BUT only if to generic industries, not picking winners.

2. "if a department consistently "gets it wrong" and funds unsuccessful projects, some sort of penalty should apply to act as a deterrent against poor decision making."

How about simply a national agency that does audits? This is difficult when even the Productivity Commission is clearly held back by its political masters from making politically sensitive inquiries.

3. "it is all but impossible to convince governments not to remain involved in industry, "

It might be possible with some national auditing as proposed in point 2. Exposing the ineptitude and linking it to the parties, certainly creates a disincentive to meddle. The recent biodiesel support under the guise of "renewable energy" goes to the top of the list in recent years.

Government has a role. But not in picking and supporting targeted industries but in general infrastructure and common user infrastructure, in academia and services. Its time. It is time their track record was exposed to the voting public.

I've said before that "picking winners" is a bit of a meaningless term: e.g. to call funding for renewable energy "picking winners" is a bit petty, seeing as pretty much every government in the world is pumping funding into it. Likewise for nanotechnology, biotech etc.
If Australia didn't, we'd have no chance of competing internationally.

Wiz, I think you will find that the share market is already prepared
to pump money into nanotechnology, biotechnology etc, along with
Govt grants etc. But at the end of the day, the science has to
be good and the companies need to achieve results, which is usually
the problem.

Take a look at Ambri, which is CSIRO nano technology. It was
written up as the latest and greatest, could detect if a cube
of sugar was thrown into Sydney harbour etc. So far its been
a duster.

Take a look at Metabolic, which has received lots of Govt grants
and lots of investor funds. Again so far no results, another
duster.

So there is actually plenty of money out there for companies with
good ideas, who can make things happen. But there is also a huge
amount of money thrown at projects which are simply not good enough
and don't stand up in the marketplace.

What we need is more smart Australians! Perhaps we are just not
as smart as we like to think that we are :)

Well value added to PM's super anyway.

NEWSFLASH

My informants have just extracted a HOWARD CONFESSION which is:

"I'VE GOT $4 MILLION IN (TAXPAYER OVERSUBSIDISED) SUPERANNUATION. SO LONG SUCKERS :)"

Definitely the last animation of Johnny H (we hope).

Here's the link:

http://media.theaustralian.news.com.au/nich/20071123_secret_video.htm

Do not watch this before the election (if YOU dare).

Cheers

Poida

So why not acknowledge what actually works?

What works is support for infrastructure; support for academic institutions and for conditions (ie, tax concessions and broad incentives [not specific grants] and taxation) and allow the market to operate freely.

The disadvantage is that government is thereby not as visible but far more effective especially with an agency reporting on government assistance performance.

Too many have their backs to the future. On this Forum as well.