Bendy flyer, I know you are well meaning,intelligent and your heart is in what you posted.
Your problem comes from your initial assumption:
The responsibility lies fairly and squarly with governments of all persuasions and their failure to understand the industry and governance generally
I am sorry to have to tell you that they do understand "the industry and governance generally".
They have made a conscious decision that it is not in their party political interests to foster the industry.
Contrary to popular opinion, there are plenty of highly intelligent people in both parties and the public service who are perfectly aware of the damage CASA has done, and it's cost to the taxpayer, even without multiple reviews by the Senate. The problem is that there are no votes in fixing the problem and plenty of risk to their backsides in supporting, let alone instigating, change in a politically volatile safety sensitive arena like aviation.
To put it simply, if the Government changes one comma of the aviation act and an accident occurs during the life of the parliament that did it, the opposition and the public will beat them to death at the next general election for "meddling with air safety".
To put that yet another way, giving CASA $250 million over 20 years to piss against the wall is cheap political insurance against the political fallout from (God forbid) a major disaster in Australian airspace involving Australian registered and operated aircraft. They know CASA is wasting money as far as pure economics is concerned, however CASA provides priceless political insurance in return.
The only solution is for the aviation industry to beat them to death, metaphorically speaking, if they don't support reform. As I have suggested time and again, the way to do that is by targeted campaigning in marginal seats in order to scare incumbents in those seats to electoral death.