The Council of Trade Unions says a $152 million package to create work for young people does not go far enough.
Prime Minister John Key says it will create up to 16,900 work, traning and education opportunities.
However, CTU president Helen Kelly is worried a wage subsidy of $5000 for employers who take on low skilled young people could affect older workers.
And she says there are 58,000 people aged between 16 - 24 who are unemployed, so the package won't go far enough.
The Northern Employers & Manufacturers' Association also says the package announced on Sunday could harm the chances of older, more skilled people looking for work.
Chief executive Alasdair Thompson says that could lead to jobs being given to young people over those with more skills and experience.
The Labour Party says the Government's plan could have been more ambitious.
Long term goal for Govt
The Prime Minister says the Government's long term goal is to make sure young people are not on the dole and are instead in work, training or education.
Mr Key says unless there are exceptional circumstances, the Government does not want those teenagers on the independent youth benefit.
He told Morning Report that legislation will come to the House at the end of the year stating that as a general rule, 16 and 17 year olds should be in either work, training or education.
The officer in charge of a scheme run by the Army at Burnham says the Government's expansion of the programme will provide great opportunities for more young people.
The scheme is getting a $19 million boost that will create two new centres in the North Island and raise the number of participants from 720 per year to nearly 2000.
Major Cate Linton says the programme helps youth learn life skills, use of initiative and team development.