If the government provides direct support to medium sized companies, it should result in a dividend paying shareholding in that company. Support should never be simply given away. This shareholding should then pay dividends as any other share in the company with those dividends received as government revenue. This kind of assistance should only be available for limited reasons:
- Enable a company to expand operations significantly in a specific way
- Establish export business
- Establish business in another state
- Establish new factory or building
- Fund R&D programs that are in an industry or niche of interest for development.
- Enable a company to divide into separate entities to better focus each organization.
This kind of support must be regulated such that a single company cannot claim multiple times to fund substantially the same goal without reaching that goal. Repeated attempts should attract a maximum of one third less assistance to a maximum of three attempts. After that point, no further assistance is allowed to reach that goal, but the shareholding is maintained to ensure some return should result.
This kind of investment body already exists in the form of government superannuation funds, these new investments should follow the same regulatory framework and improve on it over time.
This requirement does not apply to small businesses or startups, they can receive assistance and funding as required; but that assistance must be regulated to avoid abuse by speculative entrepreneurs. This means that any request for assistance must be accompanied with a detailed business plan that explains who will perform which tasks in what timeframe to accomplish the goals of starting the business. If the applicant cannot show a plan with reasonable effort given by nominated people who have the time available to them, then no assistance will be available. This is aimed to prevent entrepreneurs from inventing multiple paper businesses to rort the system.