"Having a sham public consultation when Cabinet has already made a decision to put taxpayer funding into a new trust fund is appalling," he said in a statement.
"People working at MYD have only been given two weeks to put forward their views on the proposal, leaving many to conclude there is little room to move."
The roles being cut included those which an independent review ordered by Ms Kaye had shown were effective, he said.
The Government would put $1 million in and seek a matching sum from those private parties to provide more opportunities for disadvantaged youth to take part in programmes.
Many of those opportunities were currently only available for those whose parents could afford it.
Ms Kaye said there was a need for "more clarity and purpose" in the ministry's activities and for funding to be channelled where it would make the most difference.
Ms Kaye said it would be a big change for a small department, but currently $2.9 million was spent on operational costs by the ministry which administered $6 million for youth development programmes.
"That is too much for a small agency. I guess there'll be 10 fewer officials in Wellington, but that's 10,000 more places for youth development opportunities."
She said 18 per cent of the funding was spent on disadvantaged youth and after the changes that would rise to 30 per cent. She planned to set up either a charitable trust or a board that would include the ministry and philanthropic and private interests.
She said many young people who had gone off the rails and then turned their lives round credited either an adult mentor or support to do something they were good at.
"We've been too relaxed as a country in investing in opportunities for young people. If they've got access to role models it makes a difference. There's a whole lot of philanthropic and private organisations in this space and we need to use that better."
The Ministry of Youth Development restructure was ongoing and the changes would be in place by April next year.
