PM: Youth job plan just the start

John Key says that there will be more money available for contingencies, but warns there is a limit. Photo / Mark Mitchell

Prime Minister John Key is promising further measures to tackle soaring unemployment on top of a $152 million plan to get thousands of young New Zealanders off the dole.

But he has indicated they won't be as generous as the nine programmes in his youth opportunities package announced yesterday.

Mr Key said the next measures being worked on would vary in size and in what areas of New Zealand they targeted.

The Government has budgeted $254 million for contingencies in the current year and the new spending in yesterday's package amounts to $120 million over three years.

"There is obviously a limit to the amount of money we have in our contingency but there will be more," the PM said yesterday after unveiling the package at the National Party conference in Christchurch.

The youth package includes nine new or advanced schemes. The new schemes include subsidising businesses to take on low-skilled young people for six months, paying the minimum wage to those on benefits to carry out community projects, and funding to allow university students to undertake summer research scholarships.

The latter scheme is a result of February's Job Summit, as was the national cycleway project and the nine-day fortnight.

Some of the policies are fine-tuning of existing ones - for example, earmarking $5.3 million in subsidies for young people to work on the cycleway.

Mr Key said the package had been worked on for the past two months. He chose not to reveal that the work was on-going when Labour criticised him in recent weeks for not having a comprehensive response to unemployment arising from the protracted recession.

Last night, Labour described the initiatives as "okay but too timid".

Mr Key told the National conference that youth were the target of the package because they were the fastest-growing group on the unemployment benefit.

Almost a third of the 51,000 people on the dole are aged 18 to 24.

In June last year, 4000 young people were unemployed. Now there are 17,000.

The PM said he was concerned that for young people starting their working life, a long period of unemployment could be very damaging and their aspirations could be permanently weakened.

"Some may be tempted to fill unoccupied hours with petty crime, drinking and drug use, or other activities that sell them way short of their potential."

The policies would not create a job for every young unemployed person over the next 18 months but would provide "a new rung on the ladder".

Mr Key said after his speech that it was important to keep the policies coming in a rolling-maul approach to maintain confidence in the economy rather than having a "big bang" approach.

If the Government had spent all the contingency money at once, that might have produced a great sugar fix like "17 Red Bulls in an hour. But later on ... there's nothing else for us to do."

The "rolling maul" showed that the Government could "play some part in terms of trying to keep the economy feeling as though it is moving forward and that we are supporting it".

While growth in the economy is expected to improve in coming months, unemployment is forecast to continue rising, with numbers on the dole reaching 85,000 in June next year and peaking the year after that at 99,000.

* Beating the recession

JOB OPS

4000 six-month placements.

$5000 wage subsidy paid to employers.

COMMUNITY MAX

500 positions costing $40.3 million.

Six months' work on community programmes, plus one supervisor per four jobs.

Minimum wage for 30 hours a week.

NATIONAL CYCLEWAY

500 jobs costing $5.3 million.

INDUSTRY PARTNERSHIP

600 industry-specific jobs out of existing funding.

YOUTH GUARANTEE

4000 positions costing $52.7 million.

2000 places a year for 16- and 17-year-olds not engaged in school.

Fees-free training.

SERVICE ACADEMIES

Extra training places for Year 12 and 13 students for careers in the Defence Force, costing $2.6 million.

LIMITED SERVICE VOLUNTEERS

2500 places costing $19.1 million.

1250 new places in military-style training programmes.

POLYTECH & TECHNOLOGYINSTITUTE FUNDING BOOST

700 more students costing from $8 million.

SUMMER SCHOLARSHIPS

1600 scholarships at a cost of $4 million.