Senior Turnbull government ministers are hitting the hustings to promote a controversial youth internship program that starts this month.
Young people who sign up might find themselves hit with an unexpected tax bill, as the government waits for federal parliament to approve the program’s details.
The PaTH program, announced in the 2016/17 budget, seeks to encourage jobseekers under 25 to do four-week to 12-week internships by paying them $200 a fortnight on top of income support payments and giving the employer a $1000 upfront payment.
“It’s all about business working together in hand with young people and the community to ensure young people can get themselves into a position where they can get a job and they can keep a job,” Treasurer Scott Morrison told reporters in Sydney on Monday.
“They can get an apprenticeship, they can get a traineeship, they can get a long-term job. Because once they have a job, they have choices. When they’re on welfare, they don’t have those choices.”
The program is being rolled out even though parliament has not passed the legislation.
The legislation is needed to ensure the $200 payment, which comes on top of a young job seeker’s social security payments, is not taxed as income for work.
It will also ensure that anyone who drops out of the program for whatever reason can have their social security payments restored without having to make a new claim.
The tax office and Department of Human Services declined to comment.
Labor and the Greens don’t support the PaTH program.
Labor spokesman Ed Husic said the 30,000 subsidised interns would be forced into a “weak labour market that’s suffering from record high under-employment and record low wages growth”.
He pointed to comments by the Australian Council for Social Service which said the internship positions were likely to displace paid jobs for other young people, which represented a “fundamental flaw” in the program.
ACTU president Ged Kearney said young people needed affordable education, “real qualifications” and investment in traineeships and apprenticeships, not workers who “not only don’t make a dent in your payroll but actually bring in $1000 every time you hire one”.
It is understood about a dozen businesses have so far signed up to the scheme.