The State Government’s Backing Queensland Business Investment Fund, announced by Treasurer Cameron Dick last week, sounds like a really good idea.

Who could object to a $500 million, government-funded scheme to “support good quality Queensland businesses that need capital to create jobs”?

Supporting job creation is right up there with supporting parenthood.

But the Backing Queensland Business Investment Fund is actually a really bad idea.

If  “good quality Queensland companies that need capital to create jobs” can’t convince private-sector lenders to back them, why should we, the taxpayers, step in to help?

Dick’s explanation is that, “business as usual will not cut it as we recover from COVID-19”.

But the reality is the world is full of investors with money to burn looking for the next big thing – particularly in these pandemic-ravaged times, when pickings are slim.

Banks are cashed up and regulators have given them the green light to go strong when it comes to supporting their business clients.

In short, there’s no market failure that suddenly needs government intervention, especially for the sort of companies the new fund is aiming to help.

Dick says target clients will be small and medium Queensland-based businesses that are relatively mature, have well-established and reputable owners and a defined market opportunity.

Exactly the sort of businesses, you’d think, that private equity lenders and bankers ready to take on a certain amount of risk, would be lining up to support.

But if the private sector is rejecting them for being too risky, why on Earth should a government-backed fund step in where the more commercially minded fear to tread?

Don’t worry, says Dick.

He reassures us that even though the Government will be borrowing the $500 million for the new fund, we the taxpayers won’t feel a thing.

As he explains it:

“With interest rates at record lows, the Queensland Government will borrow to invest in Queensland business and industry to create more jobs.

“Importantly, as these funds are commercial investments, Queensland taxpayers will not be responsible for servicing those borrowings.

“That’s because these investments will be commercial and they will generate revenue that will service the debt.”

If only investing were so easy. There’s always an element of risk.

Dick makes no mention of what happens if some of the fund’s investments turn out to be loss-making duds that can’t cover their debt.

But he does offer reassurance by noting the fund will be managed by “our world-class fund managers, the Queensland Investment Corporation.”

There’s no question about QIC’s competency and QIC boss Damien Frawley has already made it clear he won’t be investing in dogs.

“Ultimately, with all of these things we have to make sure we get a financial return out of this,” he told the Australian Financial Review.

“I’m sure that’s what the Government want us to do. I don’t think it’s grant money, put it that way.”

QIC clearly has no intention of becoming a lender of last resort or compromising its normal presumably rigorous standards for judging the worth of an investment – even for the honourable, and politically attractive, cause of helping Queensland companies create jobs.

Which gets us back to the question, why is the Government even setting up the Backing Queensland Business Investment Fund?

Pure politics.

There’s an election looming. And what better way to try to win support from a particular constituency – in this case, the small and medium business community – than to throw some more money around, especially when you can use the cover of COVID-19 to do it.

If the Government were really serious about helping emerging Queensland companies, it should concentrate on making them as attractive as possible to potential investors rather than simply adding to the large pool of private money looking for the next big thing.

It should be making sure that there’s no unnecessary red tape holding them back and that the right infrastructure is in place, that taxes and charges aren’t too onerous and that the education system is delivering qualified workers – in other words, the core business of government.

But what’s sexy about declaring “We’re doing what we’re supposed to be doing”? Especially in the weeks before an election.

And so, we have the $500 million Backing Queensland Business Investment Fund.

We used to talk about cheap political stunts.

They’re far more expensive these days.