Bruce Chapman and Ric Simes outline a potential new approach for the public sector in assisting regional economies.

A novel aspect of their proposal involves the government providing some proportion of the required finance in the form of a loan to be repaid by the enterprise only when and if the project becomes economically successful. This form of government intervention, known as income related loans, is designed to limit the extent of economic risks faced by the enterprise, and has the desirable equity characteristic of repaying to taxpayers some return to their investment.