Research Australia has responded to the Queensland Competition Authority’s Draft Report of Queensland Government Industry Assistance. Research Australia supports the need for a clear rationale and strict criteria for Industry Assistance Programs but suggests that the proposed criteria need to be developed and applied more appropriately. In the case of health and medical research, the opportunity to improve the effectiveness and efficiency of the health care sector (with a saving to the Queensland Government) and to improve health and wellbeing need to be recognised as legitimate objectives of Government assistance. The submission highlights the complex interaction between public research funding and private sector involvement in the commercialisation of health and medical research, and points to some successful Queensland models that are worth supporting.