Employers say jobseekers are missing out on work because they can't pass the tough new driving test.
About 4000 people in Auckland have signed up for free courses designed to help them into employment.
But Michael Barnett, chief executive of Auckland's Chamber of Commerce, says many youngsters are being hindered because they keep failing the new test, which was introduced in February.
The Herald on Sunday has revealed that testing officers at driver licensing centres have been told to fail about 60 per cent of candidates.
The information came from a leaked memo from NZ Driver Licensing, the sole company contracted to conduct the tests for the Government.
Barnett said that the Chamber of Commerce helped about 1000 young people find work last year, but many were now struggling as most employers wanted people with "a proper driving licence".
"We help people compile CVs and advise how best to utilise their skills. But what is the point in doing all that if they are then being held back by this new test?
"We now have hundreds of out-of-work youngsters who have never been better prepared for employment.
It is like pulling the rug from under them."
Mawera Karetai, boss of Whakatane fishing and hunting guide company Aims, wants to give her promising young apprentice Michael Simpson more hours and a bigger pay packet, but needs him to have a driving licence.
Karetai said her business was suffering because Simpson, 17, was too scared to sit the new test after watching all his friends fail.
"This is a bright young man who is a good driver and his future is being compromised by this new test. It is crazy.
"It is the same story for a lot of young men in our area. Their confidence as well as their job prospects are being shattered."
Simpson said he desperately wanted a licence and was worried about his future.
"I want to go to college and become a forestry worker, which requires a licence. But I don't want to even try for one just now because I'm told the test is a nightmare."
Associate Transport Minister Simon Bridges said he was happy with the way the scheme was being administered by NZ Driver Licensing.
"I understand that for many people a driver's licence helps open the door for employment and mobility. But like a job, a licence must be earned," Bridges said.
"It has been very clear from the beginning that this is a more challenging test. I make no apologies for that, and we encourage people to ensure they are adequately prepared before sitting it."
A spokesman for Work and Income said financial assistance to sit a driving licence test may be available to some jobseekers, "if it is determined they have an immediate and essential need".
Driven to despair
Anna Dunphy has spent thousands flying her teenage son Jack back and forth across the Tasman in a bid to steer him through the tough new driving test.
Jack Dunphy (picture), who will soon be 17, has already made two fruitless return trips to Auckland from Melbourne to take the test.
He joined his family across the Tasman last year after staying on in Hamilton to finish boarding school.
The teen had already started driving lessons here and wanted to see the process through. He wanted to have a New Zealand licence rather than start again in the Australian system.
He failed his first test at Massey in July and couldn't pass again there last month. Anna, who was in the car when Jack sat the second test, says the testing officer went out of his way to fail him.
"The stress of bringing him back to his home country to fail has been awful," Dunphy says. "He is a good driver but his confidence has taken a bashing because of this. The test is too hard and there is too much room for failure. It is so unfair."By Russell Blackstock Email Russell