Plenty of airlines are doing that now. Singapore Flying College at Jandakot has been doing it for decades. We also had China Southern training there. I looked into a few cadet schemes when I was going for my CPL, they have always been around. The airline needs the pilots, they see them as an investment in thier future and they get a bond to ensure he investment isn;t wasted, Qantas and co don;t need to because there is a huge pool of people who are willing to put the risk onto themselves and the taxpayer.
The government funding for the CPL is only available at that same amount ($175,000 before admin fees and indexing) for vet, medical and dental students, who have achieved a top ATAR to be accepted onto the course and 100% of them have a good chance at a stable career at graduation, there is a true need for those skills, and importantly they will have the earning capacity to pay it back.
There is no such ATAR requirement for pilots. If the entry rate straight into an airline is indeed 65% (though anecdotally I hear it is far, far lower than that) then there are still 35% of them on the scrap heap, no good for GA without a great deal of further training.
Let's say there was a Royal Commission into how Neel Khokhami was able to fleece us all of millions of dollars and brag about it on the Rich List then leave the country with it in his pocket, other schools who have done similar, closed their doors and left the staff and students students high and dry. Let's say they realised that the funding is, let's put it nicely, inappropriate given the difference it isn't making to a perceived pilot shortage compared to a few people getting very, very rich.
Let's say the funding was reduced, suspended, or stopped altogether. What would the airlines do then? What did they do before?