An Australian Defence Advanced Research Projects Agency, modeled on the US DoD's DARPA, has been proposed in a paper published by the Australian Strategic Policy Institute (ASPI). I support the proposal, and not just because I suggested it myself in 1999. My proposal got some positive press at the time. I also had the honor of being pilloried in a public statement from DSTO, now Defence Science and Technology Group (DSTG). ;-)
Robert Clark and Peter Jennings propose a partnership between the Defence Department, industry and universities for research & development. This would be extended internationally to instutions in Australia's closet allies (the so called "Five-Eyes").
Jack Dalton's comments on ASPI's proposal are curious in that he expresses a grudging admiration for the Chinese political system. He notes the benefits of a centralized one party state in terms of economic development. However, I suggest centralized five-year plans are not necessarily a good way to become a world leader in a technical field. Japan tried this approach with the Fifth Generation Computer Systems project and found that throwing money at something does't necessarily work. Australia needs something more decentralized, fluid and flexible. Even in the case of China, their central plans are not as centralized as they appear.