Budget introduces new pathway to employment for young job seekers

A centrepiece of the Treasurer’s speech tonight was the announcement of a new program to help young Australians into jobs. The program, branded “Youth Jobs PaTH” (Prepare, Trial, Hire), was advertised as “not just another training program”.

The budget papers go into more depth about the detail of this proposal.

At its heart is the establishment of a new, 12-month, pathway program called “jobactive”, targeted at job seekers under the age of 25. The first stage of the program will take the form of a six-week pre-employment skills training course. The second stage will be the expansion of an existing internship program, offering up to 120,000 opportunities to gain experience working in businesses.

Both businesses and job seekers will be incentivised to participate in this program. Businesses will receive a subsidy between $6,500 and $10,000, depending on the job readiness of the participant, and paid over six months rather than the current twelve. Job seekers will receive $200 per fortnight on top of Newstart.

The program will cost in total $751.7m over four years, but the government claims this will be funded by a subsequent reduction in job seekers who end up in the Work for the Dole program.

Work for the Dole is the current arrangement for the long-term young unemployed. After six months of unemployment, active job seekers are required to participate in some form of work experience if they wish to continue receiving Newstart payments. Under the new PaTH program, entry into the Work for the Dole program will kick in after twelve months, not six, and only if the job seeker has not found employment through PaTH. The government expects that PaTH will be successful in securing employment for job seekers, thus reducing dependency on Work for the Dole, an expectation on the back of which a saving is claimed in the budget papers.