Of course they do - that's one way government gets to know about issues that affect them and possible remedies. The problem is this: the public is kept in the dark about these high-level meetings. It takes a controversy - or a cabinet leak, as was the case with ethanol - to bring them into the open.
If the O'Farrell government is committed to transparency it might consider two changes as a matter of priority: alter the definition of a lobbyist to include any private sector interest pushing for government action; and introduce a publicly available lobbyist contact register for every department and its minister.
Surely the government has nothing to hide.