New ideas for government investment in the arts & culture support?

Recently, columnist Brian Rudman, writing in the NZ Herald, proposed that instead of the government  investing $50million taxpayer dollars to build a national cycle trail -- suggested  by Prime Minister John Key as a worthy  employment creation scheme with lasting value ---  that instead an equivalent amount be invested in arts & culture "make work" schemes.

Rudman offered as a suitable model of the schemes established and funded under the New Deal policies of the Roosevelt administration in the USA during the 1930s depression years -- "He set up federal employment schemes for artists, writers, actors, musicians, film-makers, photographers, dancers - you name it. More than 225,000 works of art - including public murals, films and photographic records of the decade - were created."
"While not suggesting anything quite on this ambitious scale, funnelling a little discretionary income into our existing cultural organisations, to cushion them from the sudden effects of the recession, would protect not just the jobs of our skilled artists, but the country's broader wellbeing as well."
 http://www.nzherald.co.nz/brian-rudman/news/article.cfm?a_id=1&objectid=10559797&pnum=0i

It struck me, reading Rudman's words, that this is indeed a good time for the government to invest in the arts and culture. But rather than importing an American model, such investment must take account of local conditions to assist survival of arts/artists/culture under our current economic climate as well as seeking to provide lasting value.

Is it time to revisit the much praised PEP schemes of the 1980s which were largely directed to creating/supporting employment in the arts & culture sector?
what was so good about them? what was their downside?
what variations did they encompass?
how do they compare to the most recent government funded "support" schemes? 
what other schemes would you like to see operating?

Please share your experience, your ideas with us.