5 May 2010

Government defends youth employment package

7:50 pm on 5 May 2010

The Government is defending its policies to deal with youth unemployment following revelations the Treasury advised they represented poor value for money.

Documents obtained by Radio New Zealand reveal the Treasury warned that National's showpiece youth opportunities package would have little effect on youth unemployment.

Social Development Minister Paula Bennett says she rejected the Treasury's advice and the youth opportunities package has made a difference to youth unemployment.

Ms Bennett says if the Government had taken the Treasury's advice, the more than 8000 young people on various job support schemes would have missed out on those opportunities.

Labour Party deputy leader Annette King says youth unemployment has risen sharply and the Government's package has made little difference.

The documents show the Treasury was particularly scathing about a number of initiatives, including Prime Minister John Key's pet project, the national cycleway.

The papers, dated July 2009, make it clear Mr Key was worried about the impact of the recession on young people.

But the Treasury warned the $120 million cost of the youth opportunities package could put the Government under pressure if it wanted to pay for other priorities later in the year.

In particular, it criticised specific schemes in the package, including a proposal to subsidise young people to work on the national cycleway, saying wage subsidies were expensive and unlikely to create many long-term jobs.