The Government is to spend $152 million to create work, education and training opportunities for unemployed youth.

Prime Minister John Key told the National Party conference that the money needed to be spent as the number of unemployed youth rose from 4000 last June to 17,000 this June.

"It is absolutely critical that we provide young people with adequate development opportunities. If we don't we risk diminishing the potential of an entire generation of New Zealanders," Mr Key said.

The largest amount of money - $52.7 million - is to expand and implement earlier the Youth Guarantee policy.

This will create 2000 new places for 16- and 17-year-olds not engaged in school to study at polytechs.

There will also be $20 million spent on a Job Ops programme to give 4000 low-skilled people a wage subsidy of $5000 over six months to get them into jobs.

Another $40.3 million scheme to be known as Community Max will get 3000 people places in community programmes paying the minimum wage for 30 hours a week and a $1250 training payment paid to the community group.

In all, Mr Key outlined nine programmes to be targeted at youth unemployment, some of which were expansions of current programmes.

These included:

* $5.3 million to encourage developers of cycleway projects to hire 500 young people;

* $2.6 million for extra training places in the defence forces;

* $19.1 million for 1250 more places in six week military style training programmes;

* $8 million for 700 more students in polytechs; and

* $4 million for 1600 new places in summer research scholarships.

The Government estimated that 16,900 young people would be assisted by the policy.

Of the $152 million, the total new spending is $120 million between 2009 and 2011.

The money will come from the "between budget contingency fund".

Social Development Minister Paula Bennett said the Job Ops would target 16- to 24-year-olds with low qualifications.

A business would get $3000 for employing a person up front and then $2000 at the end of the six-month period.

Ms Bennett said the younger a person went on the dole, the harder it was to get them off.

"This is a short-term, targeted solution to a very real problem facing New Zealand," Ms Bennett said.

The Community Max programme could apply to any community group.

Ms Bennett said projects could include renovating a marae or tidying up parks and reserves.

"This is a completely new programme - times are hard for communities and their young people. This policy will connect young people to the positive work that goes on in our communities," she said.

- NZPA